USD/CHF: Fibonacci Resistance Back In Play

Posted Tuesday, August 27, 2019 by
Shain Vernier • 1 min read

The Greenback is showing signs of life, posting several mid-session rallies vs the majors. Gains in the USD/CHF are highlighting the action, with overnight losses against the euro and Japanese yen having been largely erased. At this point, it appears the USD is gaining momentum as the day wears on.

About an hour ago, the U.S. Consumer Confidence report for August was released to the public. If you missed it on our Live Economic Calendar feature, the figure came in well above expectations at 135.1. In addition, the Richmond FED Survey also outperformed consensus estimates. While these events are not primary market movers, they do suggest that the U.S. economy is in a positive position. With Q2 GDP on tap for Thursday, today’s numbers are being viewed as solid news for the Greenback.

Thus far, the USD/CHF has been the big winner, gaining more than 35 pips on the session.

USD/CHF Breaks Above .9800

In a Live Market Update from last week, I outlined a short trade recommendation from the 62% Current Wave Retracement (.9853). Although still on the horizon, this level may be challenged again in the near future.

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

Here are two levels to watch as the trading day progresses:

  • Resistance(1): 62% Current Wave, .9853
  • Support(1): Bollinger MP, .9808

Bottom Line: Normally, I am not a big fan of repeating trades. However, the sell from .9850ish has a solid upside and limited risk. Until elected, I will have sell orders in the queue from .9848. With an initial stop at .9881, this trade produces 25 pips on a sub 1:1 risk vs reward ratio.

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