USD Having A Big Day On The Forex
Shain Vernier • 1 min read
The looming uncertainty surrounding today’s U.K. Parliamentary vote on May’s Brexit plan has benefited the Greenback. Performance is strong across the forex, highlighted by USD rallies vs the Euro, Swiss franc, and British pound. While these markets are capable of reversing upon the vote’s outcome, the USD appears to be the “dog with the least fleas” at this point.
It has been a trend day up for the USD Index, featuring a test above the 95.500 handle. This is a key technical development and one that has been furthered by the USD/CHF rallying toward par.
In the global currency trade, the Swiss franc is the traditional safe-haven asset. It is because of this fact that the USD/CHF is a benchmark for the Greenback’s relative worth. Valuations above par (1.0000) are indicative of a strong USD.
Bottom Line: At press time (12:15 PM EST), the USD/CHF is trading just beneath the .9900 handle. This is an area of formidable resistance, as the Daily SMA is located at .9900. For the remainder of the session, I will have sells queued up from .9899. With an initial stop at .9926, this trade produces 27 pips on a standard 1:1 risk vs reward ratio.
It is inherently risky to hold open forex positions into today’s U.K. Parliamentary vote scheduled to begin at 2:00 PM EST. If you are going to do so, be sure to have your stops down and leverage in check.