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Volatility Rules U.S. Session, USD/CHF Above .9900

The U.S. indices have bounced back, posting big session gains in a bid to wipe out Monday’s losses. While there are still several hours left in the trading day, stocks are in the green as bargain hunters have come out of the woodwork. Gains in the DJIA have led the way, with values returning above the 22,000 level. Subsequently, safe-haven pricing has suffered, featuring losses by the Swiss franc and Japanese yen against the Greenback. On a side note, gold futures have given back early gains and entered rotation slightly above even.

USD/CHF Technical Outlook

In a live market update from earlier today, I talked a bit about the size of the daily trading ranges facing the USD Index. The USD/CHF is showing much the same phenomenon as a result of the recent volatility facing stock and commodity markets.

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

Here are the levels to watch as the trading week progresses:

  • Resistance(1): Bollinger MP, .9940
  • Resistance(2): Daily SMA, .9948
  • Support(1): Spike Low, .9840

Overview: If you are looking for an example of whipsaw market conditions, look no further than the daily chart of the USD/CHF. Will the negative-positive pattern continue until the calendar flips to 2019? Possible, but not likely.

Price action in the USD/CHF will reflect the evolving risk appetite in the equities markets. If the global stock indices break directionally positive or negative to end the trading year, this market will react accordingly. In my opinion, we may be looking at a retest above par value or a run to .9800 by January 1. Either way, there is likely some forex action on the horizon for the Swissie.

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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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