To say the least, it has been an active day on the markets. After an extremely strong open, the U.S. indices have given back much of the early-session gains. Bullish opening GAPs in both the DJIA and S&P 500 are being challenged. At the halfway point of the trading day, it appears that the markets are still in the process of pricing the G20 developments into assets across the board.

Action on the forex has been mixed facing the Greenback. The commodity dollars have rallied considerably, with the Aussie and Loonie posting big gains vs the USD. Tight trading ranges have been the story for the EUR/USD and USD/CHF. Let’s dig into the technicals facing the Swissie and its evolving relationship with par value (1.0000).

USD/CHF Technical Outlook

From a technical standpoint, November featured a massive USD/CHF sell-off and subsequent rotational pattern between the round numbers of .9900 and 1.0000. Are we in for a December breakout?

Earlier, rates tested the 38% current wave retracement (.9992) and fell away to the bear. This level has been under fire repeatedly for the past week. Thus far, it remains valid topside resistance. Here are the levels to watch for the remainder of the session:

• Resistance(1): 38% Current Wave, .9992
• Resistance(2): Bollinger MP, 1.0009
• Resistance(3): Daily SMA, 1.0029

Bottom Line: In the event that price breaks above the 38% level, a short play from resistance will come into view. Until elected, I will have sells in the queue from 1.0004. With an initial stop loss at 1.0032, this trade produces 25 pips using a sub-1:1 risk vs reward management plan.