One of the lone bright spots on today’s forex has been the USD/CHF. Rates are on the bull, trending north by more than 30 pips. Subsequently, a key daily 78% Fibonacci resistance level has come into view. In the event it is taken out, a test of March’s high (1.0124) will become highly likely.
All week long, safe-haven assets have been getting pounded. The USD has posted nice gains vs the Swiss franc and Japanese yen, while gold has tanked. Risk is officially on and no one is interested in the safe harbors ― at least not yet.
USD/CHF Technical Outlook
The past 48 hours have been good ones for USD/CHF bulls. Rates have broken above last week’s high and are driving north toward 1.0100. Since the bearish action of late-March, this market has been content to grind higher on a daily basis.
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For the immediate future, there are two resistance levels on my radar:
- Resistance(1): 78% Current Wave Retracement, 1.0073
- Resistance(2): March High, 1.0124
Bottom Line: At press time (12:30 PM EST), the USD/CHF is pushing session highs at the Current Wave 78% Retracement (1.0073). Holding a short position from 1.0073 isn’t a bad countertrend play. With an initial stop loss at 1.0111, this trade produces 25 pips on a rejection of Fibonacci resistance using a sub-1:1 risk vs reward ratio.
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