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Safe-Havens On The March As Uncertainty Reigns

At the halfway point of the U.S. session, stocks are being clobbered and safe-havens bid. The U.S. indices are once again in the red, led by a 250 point downtick in the DJIA. Gains are being seen in gold, the Swiss franc, and Japanese yen. No matter how you slice it, yesterday’s FED Announcement is playing huge into today’s trade.

USD/CHF Technical Outlook

Since rejecting par value last week, the USD/CHF has lost a shade more than 100 pips. Wednesday’s rally on the ¼ point FED rate hike has proven short-lived. Bears continue to dominate the forex action, driving rates toward downside support.

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

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

  • Resistance(1): Bollinger MP, .9946
  • Resistance(2): Daily SMA, .9955
  • Support(1): Spike Low, .9862

Bottom Line: The early-session test of support at the daily Spike Low (.9862) may be the initial stages of a macro-rotational phase between the .9850 and .9950 handles. If this proves to be accurate, then a late-day scalping plan for the USD/CHF is an affordable way to play the action.

For the rest of the day, I will be looking to scalp to the long from the Spike Low area. Buys from .9859 are an affordable way to play intraday downtrend exhaustion. Using a tight 1:1 risk vs reward trade management plan, and an initial stop loss at .9847, this play produces 12 pips on a bounce from the .9850 handle.

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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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