USD/CHF Challenging Weekly Downtrend - Forex News by FX Leaders

USD/CHF Challenging Weekly Downtrend

Posted Tuesday, September 22, 2020 by
Shain Vernier • 2 min read

The markets are in a state of flux today as the big story continues to be a rally in the Greenback. Going into the final hours of the Wall Street session, the DJIA DOW (-86), S&P 500 SPX (+3), and NASDAQ (+43) are laboring. Bucking all correlations, safe-havens are also losing market share. A sell-off in gold and rally in the USD/CHF is evidence of the trending dollar.

If you subscribe to conventional wisdom, then this week’s run to dollars is perplexing. Equities, safe-havens, and commodities are all struggling against the USD. This is an interesting phenomenon, as the Fed has pretty much guaranteed at least 2-3 years of dovish policy. For now, the financial markets appear to be showing signs of both COVID-19 and U.S. election angst.

With a little over 40 days until the U.S. presidential election, the race appears to be a toss-up. Media polls suggest that Biden has a 6+ point national lead, while oddsmakers have things much closer. Biden is being installed as a slight favorite (-133), while Trump is getting a positive return (+108) per internet gaming websites. Without a doubt, the confirmation process for the vacant seat on the Supreme Court will play significantly in the election’s final outcome. 

Right now, forex traders are driving the USD/CHF toward several key resistance levels. Let’s dig into the weekly technicals and see if there is a selling opportunity.

USD/CHF Challenges Weekly SMA, Fibonacci Resistance

At press time (1:15 PM EST), the USD/CHF is trading in the vicinity of 0.9200. Buyers are outpacing sellers and rates are trending higher.

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

Here are the levels to watch going into midweek trade:

  • Resistance(1): 38% Current Wave Retracement, 0.9202
  • Resistance(2): Weekly SMA, 0.9203
  • Support(1): Psyche Level, 0.9000

Bottom Line: Earlier today, topside resistance withstood a sustained test from the Swissy. If price fails to close significantly above 0.9200, a retracement may be in the cards for coming sessions.

Ahead of today’s close, I will be selling the USD/CHF at market from 0.9192 to 0.9205. With an initial stop loss at 0.9226, this trade produces a static 25 pips on a rejection of topside resistance.

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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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