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USD Trading To The Bull Vs The Majors

Aside from a selloff in the USD/JPY and rally in the GBP/USD, the Greenback is on the march vs majors. Currency players do not seem too concerned about a dovish FED crushing the USD in the intermediate-term. Bids are coming in on behalf of the dollar and rates are recovering from a brutal FED-week sell-off.

At the moment, it is tough to overstate just how bearish the fundamentals are for the USD. Rates hikes appear to be a thing of the past and the FOMC is projecting a forthcoming downturn in the U.S. economy. Factor in the political uncertainty of the 2020 Presidential election, and there are more questions than answers facing the Greenback.

USD/CHF Rallies From .9900

In a Live Market Update from earlier in the week, I outlined a long trading plan for the USD/CHF. The trade fell short of the profit target, only producing 15 pips ahead of Wednesday’s FED announcements. From then on, the bears ruled the day.

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

Here are a few support and resistance levels to watch in this market for the near future:

  • Resistance(1): 38% Retracement, 0.9982
  • Support(1): Swing Low, .9894

Bottom Line: Today’s price action in the Swissie suggests that the daily bearish trend may not yet be over. Rates failed to test the 38% retracement level, which is a signal that sellers are still in control of this market.

However, there may be a trading opportunity set up in the coming sessions. Until elected, I will have buy orders in queue from 0.9904. With an initial stop at 0.9989, this trade produces a tidy 15 ticks on a bounce from the 0.9900 level.

The major benefit of going long from just above the Swing Low (.9894) is affordability. The USD/CHF has a tendency to enter rotation after a large move. If this is the case, taking a few pips from prolonged rotation between .9900 and .9950 is a pretty good way to trade the action.

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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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