USD/CHF Gains Traction Above 0.9100 - Forex News by FX Leaders
USD/CHF

USD/CHF Gains Traction Above 0.9100

Posted Monday, August 24, 2020 by
Shain Vernier • 1 min read

The Greenback has kicked the week off with mixed performance across the majors. Slight losses vs the euro and British pound have been offset by a steep rally against the CAD. Meanwhile, the safe-havens have been relatively flat. Tight trading ranges in the USD/CHF, USD/JPY, and XAU/USD continues to be evident.

On the economic news front, it’s been a quiet Monday session. Perhaps the biggest takeaway has been the Fed’s ongoing dovish policy. A quick review of the CME’s FedWatch Index still shows a 100% chance of interest rates holding at 0.0-0.25% until at least next March. Also, this morning’s falling yields on the 3 and 6-month T-bills suggest that the Fed remains committed to aggressive open market operations. Both issues aren’t good news for the USD, which is holding near yearly lows.

For the USD/CHF, some bullish traction is being found near the 0.9100 handle. Will it last? Let’s take a look at the weekly technicals and break down today’s action.

USD/CHF Attempts To Hold The Line At 0.9100

In a Live Market Update from early August, I broke down 0.9000 as being a potentially strong area of support. Thus far, the level has proven valid, with rates bouncing 100 pips since a test of this area last week.

USD/CHF, Weekly Chart
USD/CHF, Weekly Chart

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

  • Resistance(1): 38% Retracement, 0.9296
  • Two-Way Catalyst: Psyche Level, 0.9100
  • Support(1): Spike Low, 0.9009

Overview: For the time being, a bearish bias is warranted for the USD/CHF. However, if we see rates break north from 0.9100, a test of 0.9296 may develop by early September. 

In the event that the Greenback does rally, a shorting opportunity in USD/CHF may set up in the coming weeks. Nonetheless, the rest of August is very likely to bring intense consolidation between 0.9100 and 0.9000.

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About the author

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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