Safe-Havens Slip, USD/CHF Violates Triple-Top

Traditional safe-haven currencies are taking a beating during the Thursday forex session, with the USD/CHF and USD/JPY breaking to the bull. Although the U.S. CPI numbers were in line with expectations, they certainly weren’t great. So, what gives?

Simply put, risk is back on. Equities continue to show strength and the USD is becoming a favorite among investors. In addition, trade war rhetoric has slowed and the NATO summit has come and gone without any major bombshells.

Aside from moderate gains in August gold futures, cash is flowing from the sidelines to the playing field en masse.

USD/CHF Technicals

Today’s session has brought serious bullish heat to the USD/CHF. Price has steamrolled through the Triple Top Pattern (.9985-.9990) and appears poised to challenge yearly highs.

Anytime the USD/CHF is trading above parity (1.0000), it speaks volumes to the aggregate strength of the USD. At press time, traders are driving this market even higher, near the 1.0015 area.

For the rest of the week, here are two technical levels to keep a close eye on:

• Resistance(1): Triple Top/Yearly Highs, 1.0056
• Support(1): Par Value, 1.0000

Bottom Line: Shorting the Triple Top Pattern at the yearly high is a good way to play rotation back toward the psyche level of 1.0000. Sells from 1.0049 with an initial stop at 1.0077 give solid trade location to the bear. Using a 1:1 risk vs reward management plan, this trade yields 28 pips.

The Swissie can be a slow-moving market. In the event that this trade goes live, be sure to check out the Comments section below for ideas on how to play the action.

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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Shain Vernier

6 years ago

It appears the stop loss at 1.0076 is a good location. As of now, this trade is rotating to the bear, just below break even.

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Author

Shain Vernier

6 years ago

This trade has posted a +25 pip move after the FED Monetary policy report. It is trader preference whether to take profits at the close or let the position ride into the weekend.

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