USD/CHF Rebounds Above .9850
It has been a whipsaw day on the forex for the Greenback. Safe-havens have taken a big step back, with uptrends developing in the USD/CHF and USD/JPY. In addition, chaotic action in the EUR/USD and USD/CAD have grabbed the attention of traders. While the beginning of the session was ominous, things have turned around for the U.S. dollar.
One reason for the 180° shift in sentiment was last hour’s release of the ISM Non-Manufacturing PMI (August). The figure came in at 56.4, above expectations (54.0) and the previous release (53.7). The strong report has brought bullish action to the USD/CHF and furthered gains for the U.S. indices.
USD/CHF Pares Wednesday’s Losses
Following a 48-hour fire sale, the USD/CHF has bounced back today. Rates are up more than 50 pips at press time (11:15 AM EST) and back above the Daily SMA (.9831).
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Bottom Line: In the event we see the positive optimism toward the USD/CHF fade, a long from the Daily SMA set up. For the remainder of the session, I will have buy orders in the queue from .9836. With an initial stop at .9809, this trade produces 25 pips on a slightly sub-1:1 risk vs reward ratio.
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