Mixed Session For The Majors, USD/CHF Approaching Parity

Posted Tuesday, June 19, 2018 by
Shain Vernier • 1 min read

It has been a mixed Tuesday session for the Greenback. Explosive gains against the commodity-dollars have been offset by lagging performance vs safe-havens. With traders and investors scanning Twitter for the next tariff comments out of President Trump, the mood is best described as tense.

Economic Data

Housing data has been on the front-burner for today’s U.S. session. The last several real estate releases have been disappointing. Let’s take a look at the hard data and see if today’s numbers followed suit:

Event                                                             Actual             Projections

Building Permits Change (MoM, May)        -4.6%                    -1.4%

Housing Starts Change (MoM, June)            5.0%                     1.4%

4-Week T-Bills                                                  1.815%                 1.790% (Previous)

Permits are down and housing starts are up. It appears as though U.S. developers are well aware of the coming tight lending cycle. FED rate hikes have many impacts, one of which is the affordability of capital. Developers need money to build — it looks like the rush is on to rack profits before carrying debt becomes a profit-killing liability.

USD/CHF Technicals

The USD/CHF has been on a tear for the first half of 2018. The bulls have done well. May’s pullback is widely viewed as being a moderate growing pain. It appears that a return to parity is on the menu for the Swissie.

USD/CHF, Daily Chart
USD/CHF, Daily Chart

Here are the levels to watch for the rest of today:

  • Resistance(1): 78% Retracement, .9997
  • Resistance(2): Triple-Top Pattern, 1.0056
  • Support(1): Bollinger MP, .9908
  • Support(2): Daily SMA, .9894

Bottom Line: The Swissie has the potential to form a long-legged Doji candlestick on the daily time frame. If so, we may be in for a trade setup in coming sessions.

For now, I have sell orders queued up from just beneath the 78% retracement at .9994. With an initial stop at 1.0026 and 1:1 risk vs reward management plan, this trade produces 32 pips on a rejection of par (1.0000).

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