With not a lot of top-tier data on tap, I’ve got my sights set on USD/CHF’s short-term uptrend. Here’s the setup I’m looking at!
Fresh Market Headlines & Economic Data:
- Fed to relaunch crisis-era facility that allows large financial institutions access to short-term loans
- Mnuchin warns senators lack of action could result in 20% unemployment rate
- Australia declares emergency, warns coronavirus crisis could last six months
- Japan’s Abe to launch panel to mull big stimulus package
- New Zealand current account deficit narrows to $1.9 billion
- Leading index shows “Australia vulnerable”
- Japan’s exports fall, imports from China slump as virus impact widens
- Australia’s preliminary retail turnover rises 0.4% in February
Upcoming Potential Catalysts on the Economic Calendar:
- Euro Zone’s final CPI at 10:00 am GMT
- Italy’s trade balance at 10:00 am GMT
- Euro Zone’s trade balance at 10:00 am GMT
- Canada’s CPI reports at 12:30 pm GMT
What to Watch: USD/CHF
The Fed’s $500 repo operation as well as news of Trump pushing for a $1 trillion stimulus package kept the dollar at the top of the forex heap in the previous session.
This translated to a bit of risk appetite in the Asian session, which saw the dollar lose a couple of pips across the board. There are no top-tier reports scheduled in the next couple of hours so it’s possible that we’ll see the dollar return to its intraweek uptrends.
In USD/CHF’s case, price is almost at a 38.2% Fibonacci retracement near a mid-channel support on the 1-hour chart. Oh, and are you seeing that the 38.2% Fib also lines up with a previous resistance?
Note that USD/CHF has only dropped by half of its daily ATR. This means we could still see some selling before any bullish momentum.
A long trade around the Fib levels would make for a good trade if USD/CHF jumps back to its .9650 March highs.
If you’re not comfortable buying the dollar against the franc, however, or if you think that USD/CHF will drop lower before seeing support, then you can also ride the current downswing and bail as soon it finds support at areas of interest like .9530 or .9480.