Greenback Weakens, USD/CHF Levels

The final two trading days of April are in front of us before the fifth month of the calendar year gets underway. May is going to be a key chapter in 2019’s history, especially in terms of geopolitics and commodity pricing. However, one has to wonder if the Greenback is due to retrace before April is complete. If so, a prime buying opportunity may set up in the USD/CHF.

The Greenback Has Been On A Tear In April

Without question, April has been the strongest month in recent memory for the Greenback. The USD Index has posted fresh yearly highs, led by strong gains across the majors. Aside from muted performance vs the Japanese yen, rates have trended strongly in the dollar’s favor. For the time being, it appears that the USD is a preferred asset, alongside equities.

One of the strongest pairs for the Greenback has been the USD/CHF. Values are up dramatically over the last four weeks, north of 225 pips. In the wake of Brexit uncertainty, currency players chose the dollar over the franc consistently. Subsequently, the USD/CHF was driven from well under par to a monthly high above 1.0200. These are levels that have not been seen since January of 2017.

USD/CHF Support In View

So, is it time for an end-of-month selloff? The answer to that question is anyone’s guess, but it is certainly possible. If a retracement does develop, two daily support levels are likely to come into play.

As long as today’s high remains the upper extreme for April, these levels will be worth keeping an eye on:

• Support(1): 38% April’s Range, 1.0119
• Support(2): Daily SMA, 1.0111

Bottom Line: The daily market structure dictates that support has set up just above the 1.0100 handle. In an attempt to capitalize on a bullish bounce from this area, I will have buy orders in the queue from 1.0126. With an initial stop at 1.0084, this trade produces 35 pips on a slightly sub-1:1 risk vs reward management plan.

It has been a long trading week, full of economic events and volatility. Next week will be just as active, featuring the onset of May and a FED Interest Rate Statement. Be sure to enjoy the weekend break and get ready for another exciting five days on the markets.