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A Key Fibonacci Level For The Swissy

Today’s action has certainly resembled that of a holiday session. Trading ranges are tight and volatility is limited across the forex majors. It appears that the lack of U.S. liquidity providers is significantly impacting price action. For the Swissy, this means that rates are hanging beneath a key Fibonacci resistance level.

One of the great things about the forex is that conditions seldom stay the same for any length of time. While today’s action is slow, participation is due to pick up during the coming U.S. overnight. Here are few events likely to draw some bids and asks to the market:

Event                                                                          Country

RBA Meeting Minutes                                               Australia

ILO Unemployment Rate (Dec.)                              United Kingdom

ZEW Survey, Economic Sentiment (Feb.)               Germany, E.U.

NY Empire State Manufacturing Index (Feb.)        United States

If you are going to be actively trading during the coming 18 hours, keep an eye on these events. While they may not bring extreme volatility to the forex, business is sure to pick up.

Now, let’s take a look at a key Fibonacci level on the horizon for the Swissy.

USD/CHF: Fibonacci Resistance In View

February has been a big month for the Greenback against the Swiss franc. Rates are up more than 170 pips and back above the 0.9800 handle.

USD/CHF, Daily Chart

For the near future, there are two levels on my radar for the USD/CHF:

  • Resistance(1): 62% Macro Fibonacci Retracement, 0.9866
  • Support(1): 38% Macro Fibonacci Retracement, 0.9770

Bottom Line: In the event that rates churn higher for the USD/CHF, a shorting opportunity will set up from just beneath 0.9866. Until elected, I will have sell orders in queue from 0.9859. With an initial stop loss at 0.9906, this trade produces 40 pips on a standard 1:1 risk vs reward ratio.

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Shain Vernier
US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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