Sharp mid-session intraday moves against the Greenback have come to pass across the majors. Bullish breaks in the EUR/USD and GBP/USD have headlined the action, occurring between 11:00 and 11:30 AM EST. The sudden move in pricing is being attributed to Theresa May’s Brexit speech and FOMC Member Charlie Evans alluding to a late-2019 FED rate-cut being possible. As a result, the USD has hit an intraday speed bump against the forex majors.
At this hour, Brexit news is dominating the forex as Theresa May has just wrapped up public statements regarding a “new deal.” A simple glance at May’s comments show more of the same ― Irish backstop, consensus needed, new workers rights bill, etc. Currency traders initially took May’s speech as positive news, driving the Eurozone currencies north vs the Greenback. Price action remains somewhat bullish, but the mass bidding we witnessed earlier has largely subsided.
The USD Stabilizes Following Brexit Shock
All in all, the USD is holding in positive territory across the majors. Aside from a modest loss vs the Canadian dollar, rates are firm. Below is a look at the daily performance of the USD/CHF.
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Bottom Line: At this point, the USD/CHF has formed a prolonged “L” pattern on the daily time frame. Values are rotating near the 1.0100 handle as traders gear up for Wednesday’s FOMC Minutes. In the event they break from this area, a long trade may set up from the quarter-handle above par value.
Until elected, I will have buy orders in the queue from just above the daily 62% Current Wave Retracement at 1.0031. With an initial stop at 0.9994, this trade produces 25 pips on a sub-1:1 risk vs reward management plan.
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