USD/CHF: December Low In View

Posted Tuesday, January 14, 2020 by
Shain Vernier • 1 min read

Today’s action in safe-havens has been a bit chaotic. GOLD and the Japanese yen have lost ground vs the Greenback while the Swiss franc has gained market share. Given this morning’s ho-hum U.S. CPI report, it comes as little surprise that the USD/CHF is continuing its intermediate-term bearish trend. For the time being, it appears as though December’s low at .9646 will be the next technical level up for scrutiny.

Although this morning’s U.S. CPI report has headlined the American session, the economic calendar also featured several other peripheral metrics. Here is a quick look at a few of the more notable events:

Event                                                                                        Actual      Projected       Previous

Redbook Index (YoY, Jan. 10)                                                 5.0%             NA                     7.2%

IBD/TIPP Economic Optimism Index (MoM, Jan.)               57.4              57.3                  57.0

All in all, today’s economic data releases have been mixed. The group of figures above suggests that the retail sector is lagging, but consumer optimism is on its way up. Even though the numbers are conflicting, they are having only a modest impact on the markets. For now, the Swiss franc continues to show strength as the USD/CHF is headed south.

December’s Low In Range For The USD/CHF

At press time (about 2:00 PM EST), the Swissy is chugging toward .9650. If the bearish price action continues, a buying opportunity may set up by the end of the day.

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

Here are two key levels to watch in this market for the near future:

  • Resistance(1): Daily SMA, .9720
  • Support(1): December Low, .9646

Bottom Line: Until elected, I will have buy orders in the queue from .9651. With an initial stop loss at .9624, this trade produces 20 pips on a sub-1:1 risk vs reward management plan.

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