U.S. Indices Rally, Key Support Level For The USD/CHF

It has been a strong open to the trading week, with the U.S. indices making a substantial comeback. After the selloff of last Thursday and Friday, equities investors came into today’s session skeptical. The DJIA and S&P 500 have put many of those concerns to bed, each trending north over 1.5% in the first hour of trade.

The USD has not fared nearly as well. Losses against the Euro and Swiss franc have highlighted a bearish open to the forex week for the Greenback. In the next few hours, U.S. Treasury auctions are scheduled for the 3 and 6 month T-bills. Be on the lookout for action across the majors as investors engage the debt markets.

USD/CHF Technicals

The Swiss franc has been trending to the bear in recent days. As a result, the Swissie is nearing a key area of downside support.

Here are the levels to watch for the remainder of the forex session:

• Resistance(1): Bollinger MP, .9459
• Support(1): Daily SMA, .9426

Bottom Line: At press time, the USD/CHF is trending to the bear, pushing intraday lows at .9437. Long entries from the Daily SMA at .9426 with an initial stop at .9399 is a positive way to play rotation back to the .9450 handle. A 1:1 R/R scenario produces 27 pips on a rejection of the Daily SMA.