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Tensions between the U.S. and Iran seem to have de-escalated over the past few hours, but could this just be the calm before the storm?

Currency Snapshot:

Major Pairs Performance from MarketMilk
Major Pairs Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • German industrial production at 8:00 am GMT
  • German trade balance at 8:00 am GMT
  • Swiss retail sales at 8:30 am GMT
  • SNB foreign currency reserves at 9:00 am GMT
  • BOE Governor Carney’s speech at 10:00 am GMT
  • Euro zone unemployment rate at 11:00 am GMT

What to Watch: USD/CHF

USD/CHF 1-hour Forex Chart
USD/CHF 1-hour Forex Chart

Easing tensions between the U.S. and Iran could keep propping up demand for the scrilla while at the same time weighing on the gold-related franc.

In addition, the Swiss currency could enjoy a bit more volatility in the upcoming session since retail sales data and the SNB foreign currency reserves report will be released.

This pair has formed a complex double bottom formation to signal that its short-term selloff might be over. Price is already testing the neckline, and a break higher could set off a climb that’s the same height as the chart pattern.

Looking at the trend analysis on MarketMilk reveals a bullish one for USD/CHF:

USD/CHF Trend Analysis from MarketMilk
USD/CHF Trend Analysis from MarketMilk

A long position on a break above the neckline resistance around .9740 with a stop of 40-50 pips and a target of the same height as the double bottom at around 80 pips could work as a breakout setup.

Resurfacing tensions, on the other hand, could revive demand for the franc while traders dump the U.S. currency. In that case, a short position on a bounce off the neckline and a target at the .9660 lows could be the way to go.