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Decided to close my USD/CHF long position because of recent USD bearishness, but managed to do so with a small profit with this week’s bounce higher.


Original Trade Idea: Forex Trade Idea: USD/CHF Rising Trendline

USD/CHF 4-Hour Forex Chart
USD/CHF 4-Hour Forex Chart

I entered this trade with a longer-term bias in mind, but it’s the recent bearish sentiment on USD (decreased Fed rate hike expectations) that had me changing my mind–at least for now.  I still feel that fundamentally, the U.S. is in a better position economically that pretty much every other major economy out there, but the theme of future rate hikes is still the driving factor for the Greenback.  This is the reason that we’ve seen the U.S. dollar in recent weeks, enough to trigger my second long position at .9500.

Fortunately for me, we recently saw a strong round of risk-on sentiment on the idea easy money is here to stay and possibly a short-term boost from recent positive economic data from China, sentiment that is usually bearish for the Swiss franc.  This is probably the reason for the rally in USD/CHF, despite a round of weak economic data from the U.S. on Wednesday (weak Retail Sales and PPI numbers).

That round of weak U.S. data is the reason I think we’ll see pressure on the Greenback for a little bit longer, and we’ve got the OPEC meeting this weekend on the next move for oil production, which could become a major theme if we see anything unexpected from this event, so I decided to close this trade manually today at market (.9660). 

1st Half: -116 pips
2nd Half: +160 pips
Total: +78 pips avg./+0.23% gain on 1.00% risk

Again, long-term I’m still bullish the Greenback fundamentally, but until the market stops focusing on if/when we’ll get a rate hike from the FOMC, there is likely more Greenback sellers than buyers for now, making this a logical adjustment.

This leaves me with my NZD/USD long trade as my only open position, which took a step back in profitability after dropping back below during the morning Asia session, likely on the volatility created by the Australian employment data. I’ll continue to hold this position for now, but likely close ahead of the weekend to avoid the weekend OPEC meeting (as well as my GBP/CAD short orders).  Stay tuned!

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