U.S. Equities Rally While The Greenback Struggles

Posted Thursday, September 20, 2018 by
Shain Vernier • 1 min read

It has been a rough day for the Greenback. Equities and gold are up, with the USD struggling against the majors. Losses against the Euro, British pound, and Swiss franc have been the highlights of the forex session. If you are short the USD, then things are going pretty well thus far.

Today’s weakness in the Greenback suggests that coming FED tightening may not be a foregone conclusion. As equities rally in the wake of fresh tariffs, the USD is fading. Why? In short, the notion that the FED may back off of the USD in an attempt to limit fallout from U.S./China trade war escalations appear to be taking root. Next week’s FED meeting and commentary are certainly going to be fascinating to watch.


The Swissie is running to the bear as sentiment toward the Greenback continues to fade. Pricing of the USD/CHF is challenging the .9600 handle yet again, looking to press further south. In the event it does, a long trade setup will come to pass.

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

Here are the support levels to watch for the rest of the week:

  • Support(1): Psyche Level, .9600
  • Support(2): 62% Macro-Retracement Level, .9521

Bottom Line: At press time, the USD/CHF is trading very near the .9600 handle. If this area gives way in the coming hours, a long from the 62% macro-retracement level may be in the cards by Friday’s closing bell.

Until the weekend, I will have buy orders from .9526 queued up and ready to go. Using an initial stop at .9474, this is a short-term 1:1 risk vs reward position trade yielding 52 pips. With a bit of luck, this play will go live during the coming U.S. overnight session.

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