Will Powell succumb to Trump for future rate hikes?

The USD Is Hanging In There Vs The Majors

Posted Wednesday, December 5, 2018 by
Shain Vernier • 1 min read

Anytime Wall Street is closed for the day, it seems like markets behave strangely. Today’s session has featured an active WTI market, rebounding U.S. equities futures, and trending commodity dollars. A pleasant surprise for USD bulls has been the relative strength exhibited against the majors.

Late-week trade of the Greenback is likely to get even hotter. Thursday features a speech by FED Chairman Jerome Powell and Friday’s session is headlined by U.S. Non-Farm Payrolls (Nov.). If nothing else, forex participation will spike bringing even more action to the majors.

USD/CHF Technicals

In a live market update from Monday, I issued a recommendation for shorting the USD/CHF. The play turned out to be a success, cashing in for 25 pips earlier in the session.

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

The 38% Fibonacci retracement level (.9992) and par value (1.0000) are proving to be formidable topside resistance. This area has been tested repeatedly over the last two weeks, standing tall each time.

Here are the levels to watch going into the Thursday session:

  • Resistance(1): 38% Current Wave Retracement, .9992
  • Resistance(2): Par Value, 1.0000
  • 2-Way Catalyst: November Low, .9908
  • Support(1): Psyche Level, .9900

Overview: If we see the USD/CHF fail to break daily topside resistance at the .9992-1.0025 area, then a test beneath November’s lows will become probable (.9908). Should this scenario unfold, the .9900 level will become a key to this market for the near-term. Be on the lookout for such a move to develop following Thursday’s Powell speech or Friday’s U.S. Non-Farm Payrolls report.

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