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Short Trade Setup For The USD/CHF

“Slow” is the best way to describe today’s forex actionMuted trade and small ranges are the norm across the majors, with the bearish trending AUD/USD being the lone exception. With no action in stocks, commodities, or currencies, it looks like the markets are content waiting on the coming FED-dominated news cycle. Nonetheless, there is a possible trade setting up in the USD/CHF ― more on that a bit later.

The good thing about dead markets is that they give us a chance to gameplan for the future. A quick look at the economic calendar shows a big 24 hours on the immediate horizon. During the U.S. overnight, China’s CPI (June) is due out, as is U.K. GDP (May). Tomorrow’s session is loaded with events, highlighted by the Bank of Canada (BoC) Interest Rate Statement, Powell testimony, EIA Crude Oil Stocks Report, and FOMC Minutes (June). 

To say the least, the forex trading action is due to pick up in relatively short order. Now, on to the USD/CHF.

Par Value In View For The USD/CHF

It doesn’t get much slower than today’s action in the USD/CHF. Rates have rotated in an ultra-tight 28 pip range as traders are in no hurry to commit to much of anything.

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

Bottom Line: In my view, the key number for the Swissie is 1.0000. This area typically draws heavy two-way action and consistently acts as valid support or resistance. If we see the Greenback continue to strengthen, par in the USD/CHF will be back in play very soon.

Until elected, I will have sell orders in the queue from .9994. With an initial stop at 1.0026, this trade produces a 25 pip yield using a sub-1:1 risk vs reward management plan.

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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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