It has been a strong morning for U.S. stocks on Wall Street, led by solid gains in the DJIA DOW (+185). Relief from recent trade war tensions is being deemed the culprit, overshadowing a weaker-than-expected ISM Non-Manufacturing PMI (Nov.). All in all, taking risk is at least temporarily back in style. Safe-havens are on the retreat, led by a sell-off in GOLD and bullish bump in the USD/CHF.

Earlier today, a collection of U.S. economic reports were delivered, headlined by the ISM Non-Manufacturing PMI (Nov.). Here is a quick look at the data:

Event                                                        Actual       Projected        Previous

ISM Non-Manufacturing PMI (Nov.)       53.9             54.5                   54.7

ADP Employment Change (Nov.)             67K             140K                  121K

Markit PMI Composite (Nov.)                   52.0               51.9                    51.9

In short, this isn’t the best group of stats for the U.S. economy. With Non-Farm Payrolls coming out on Friday, the lagging ADP figures suggest that the American labor market may be softening. Further, the slumping ISM Non-Manufacturing PMI indicates that economic activity is slowing.

All in all, the numbers aren’t impressive. However, traders are ignoring the data. Instead, they are choosing to focus on Bloomberg’s report that “Phase 1” of a U.S./China trade deal may be signed ahead of the coming 15 December tariff hikes. This is a 180-degree shift in sentiment from yesterday, with safe-havens getting hit and stocks on the bull.

Let’s dig into the daily technicals for one safe-haven under intraday pressure, the USD/CHF.

USD/CHF: Technical Outlook

In a Live Market Update from Monday, I outlined the importance of a Triple Bottom Pattern (0.9839-50) on the daily timeframe. Since then, the USD/CHF has put in a vicinity test of the area and rebounded to the bull. 

If the rally continues, a few key resistance levels will come into play:

• Resistance(1): 38% Current Wave Retracement, 0.9919 (not pictured)
• Resistance(2): Bollinger MP, 0.9928

Bottom Line: Right now, the trade war rollercoaster is dominating market sentiment. If “Phase 1” of the U.S./China deal becomes a reality in the coming sessions, look for safe-havens to weaken further.

However, the bearish daily trend in the USD/CHF is still alive and well. As long as today’s low (0.9855) holds as the short-term bottom of this market, sells from 0.9919 are solid entry with the trend. With an initial stop at 0.9936, this trade produces a fast 15 pips on a slightly sub-1:1 risk vs reward ratio.