USD On The Retreat As Forex Week Gets Underway

Posted Monday, December 17, 2018 by
Shain Vernier • 1 min read

It has been a rough start to the forex trading week for the Greenback. Losses against the Japanese yen, euro, and Swiss franc have highlighted the early action. For the second straight session, the USD/CHF has been extremely active. Following a rejection of two key daily topside resistance levels, rates have fallen more than 75 pips.

Today’s move is a bit peculiar so close to the projected FED rate hike due up Wednesday. The CME Fedwatch Index is currently estimating there to be a 78% chance of the Federal Funds Target rate being increased by 25 basis points. This figure is 10% higher than one month ago and suggests that the FED is almost certain to boost rates for the fourth time this calendar year.

USD/CHF Technical Outlook

In a live market update from last week, I made a trade recommendation to short the USD/CHF from daily topside resistance. The play turned out to be a good one, with rates falling dramatically shortly after entry.

USD/CHF, Technicals
USD/CHF, Technicals

Here are several levels to watch for the near future in the Swissie:

  • Resistance(1): Bollinger MP & Daily SMA, .9963
  • Support(1): 62% Current Wave, .9910

Overview: It appears that safe-havens are gaining traction as preferred assets for 2019. Rallies in the Swiss franc, Japanese yen, and gold back up this assertion. In addition, today’s U.S. Treasuries auction came in slightly positive. Yields on the 6-month T-Bill rose to 2.485%, with the 3-month T-bill holding firm at 2.375%.

With a wide-open economic calendar for tomorrow, the markets will become increasingly focussed on Wednesday’s FED announcements. Stay tuned to FX Leaders for updates and analysis on the coming FED Interest Rate Decision and FOMC economic projections.

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