USD Closes Forex Session On A High

Today brought an exceedingly strong open to March for the Greenback versus the forex majors. Strong rallies in the USD/CHF (+0.71%), USD/JPY (+0.24%), and a bearish intraday trend in the EUR/USD (-0.18%) paced the action. The only real weak spot was in the USD/CAD (-0.75%) which unexpectedly fell in tandem with lagging WTI crude oil prices. To open the third trading month of 2021, it appears as though institutional investors are thinking that an intermediate-term bottom may be in for the US dollar.

The story of the late Wall Street session was a strong rally in American stocks. All three primary indices trended higher, led by a 3% gain in the NASDAQ Composite. Underpinnings for today’s bullish “risk-on” attitude are being reported as a downturn in T-bond yields and pending Senatorial approval of Biden’s $1.9 trillion COVID-19 relief package.

One of the forex’s biggest movers was the bullish breakout in the USD/CHF. Let’s dig into the weekly technicals for this pair and see if we can spot a trading opportunity.

A Strong Forex Open To March For The Greenback

For the third consecutive week, the USD has fared well against the Swissy. In fact, the uptrend in the USD/CHF has largely mirrored that of the U.S. equities indices. For now, it’s risk-on with market participants bidding stocks aggressively.

Until the weekend break, there is one level on my radar for the USD/CHF:

• Resistance(1): November 2020’s High, 0.9207

Bottom Line: If the Greenback continues to show strength against the Swiss franc, a shorting opportunity may come into play from just beneath the 0.9200 handle. Until elected, I’ll have sell orders queued up from 0.9194 in the USD/CHF. With an initial stop loss at 0.9229, this trade produces 30 pips on a slightly sub-1:1 risk vs reward ratio.

ABOUT THE AUTHOR See More

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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