USD/CHF Drives Toward Par Value - Forex News by FX Leaders
USD/CHF

USD/CHF Drives Toward Par Value

Posted Monday, May 13, 2019 by
Shain Vernier • 1 min read

The situation on Wall Street is going from bad to worse as traders continue to liquidate equity holdings. U.S. indices are struggling mightily with the DJIA DOW (-690), S&P 500 SPX (-77) and NASDAQ (-275) plunging to their largest daily losses of 2019. Amid the turmoil, safe-havens are putting up solid gains, led by gold and the Swiss franc. Subsequently, the USD/CHF ppears destined for a return to par value.

Safe-Haven Demand Is Up, USD/CHF Trends Lower

Investors are stocking up on Swiss francs to limit risk exposure and weather the financial storm created by the U.S./China tariff standoff. For the session, the USD/CHF has shed more than 60 pips amid the mad dash to preserve market share.

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

Here are the key levels to watch as today’s forex action concludes:

  • Resistance(1): Bollinger MP, 1.0138
  • Support(1): 62% Current Wave, 1.0025

Bottom Line: The daily 62% Fibonacci Retracement (1.0025) is a positive entry to the long in this market. Until elected, I will have buy orders queued up from 1.0028. With an initial stop loss at 0.9994, this trade produces 25 pips on a sub-1:1 risk vs reward management plan.

In times of financial strife, the Swiss franc typically gains value. It is a historical safe-haven currency and becomes a popular destination for investors during periods of market turbulence. That is exactly what we have seen today, with a majority of traders choosing to limit risk until the dust settles from the U.S./China tariff battle.

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About the author

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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