Key Fibonacci Support Level In View For The USD/CHF - Forex News by FX Leaders

Key Fibonacci Support Level In View For The USD/CHF

Posted Wednesday, June 9, 2021 by
Shain Vernier • 2 min read

It has been a rough Q2 2021 for the Greenback. Values have slipped across the majors as inflation is ticking higher amid the Fed policy of unlimited QE. With June’s FOMC Meeting only a week away, forex traders continue to bet against the USD. One of the biggest movers of Q2 has been the USD/CHF. The pair has been dominated by sellers, driving rates beneath the 0.9000 handle.

At press time, the CME Fedwatch Index estimates that there is only a 3.0% chance of a ¼ point rate hike at next Wednesday’s Fed Announcements. Surprisingly, the CME FedWatch is currently showing a meager 2.8% probability of a ¼ point rate hike taking place by year’s end. This is a curious number and suggests that traders are beginning to consider the implications of this fall’s COVID-19 flu season.

During the late Tuesday session, news on the Chinese COVID-19 front began hitting newswires. An apparent outbreak is underway in the southern Guangdong province. Authorities have stepped up testing over the past several weeks, producing a modest number of reported positives. However, Chinese authorities are locking down certain areas to stop the spread of the so-called “Delta” variant. The Delta strain of COVID-19 was first identified in India and is credited with being easily transmitted. At this point, the world is in wait-and-see mode regarding the Guangdong situation.

For the USD/CHF, rates are firmly beneath the 0.9000 handle. Let’s dig into the weekly technicals and see if we can spot a trade or two.

USD/CHF Extends Weekly Downtrend

It’s been an interesting week on the forex, with traders already looking toward next Wednesday’s Fed meeting. For the USD/CHF, rates are off -0.35% over the past 2 ¾ sessions.

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

Bottom Line: Right now, Guangdong and the Delta strain of COVID-19 have the attention of the markets. Should the situation degrade, heavy volatility is likely. For the USD/CHF, the new Delta variant could send rates even lower as investors move towards the safe-havens.

If the Swissy extends June’s bearish range, a buying opportunity may come into play. Until elected, I’ll have buy orders in the queue from 0.8914. With an initial stop loss at 0.8884, this trade produces 30 pips on a standard 1:1 risk vs reward ratio.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
The broad-based U.S. dollar is going to end this week on the bullish track and hovering near 2-month highs after U.S.
4 hours ago
0 0 vote
Article Rating
Notify of
Inline Feedbacks
View all comments