Is The USD/CHF On Its Way To 1.0000?

Posted Monday, July 29, 2019 by
Shain Vernier • 1 min read

Today has brought muted trading conditions across the forex, including the USD/CHF. Tight intraday ranges have been the norm for the majors, with currency players electing to take it easy ahead of Wednesday’s FOMC meeting. Unless we see a surprise news item hit the wires, price action and participation are very likely to remain static.

However, the action is due to pick up in the next 24 hours. The BoJ is issuing its Interest Rate Decision and U.S Core Personal Consumption numbers are due out during Tuesday’s premarket. While trade may be slow today, be ready for things to heat up very shortly.

Is The USD/CHF Heading Back To Par?

Safe-havens have posted small gains as traders are pretty much in a holding pattern ahead of the FED. Without any primary market drivers to encourage participation, the USD/CHF is flatlining near .9915.

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

Here are a few levels to watch for the USD/CHF as the week unfolds:

  • Resistance(1): Psyche Level, 1.0000
  • Support(1): Daily SMA, .9866
  • Support(2): Bollinger MP, .9859

Bottom Line: The past five sessions have been good to USD/CHF bulls, with rates rallying more than 100 pips. Given the Greenback’s recent strength, it is safe to say that a return to par value for the Swissy is a distinct possibility.

The 1.0000 handle is the ultimate big-round-number for the USD against the Swiss franc. Accordingly, shorts from this level aren’t a bad way to trade the action amid the coming news cycle. Until elected, I will have sell orders in the queue from 0.9994. With an initial stop at 1.0026, this trade produces 25 pips on a sub-1:1 risk vs reward management plan.

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