Support alert! Looks like the Greenback is about to his a major support on the daily time frame!
As you can see, USD/CHF is a few bearish candlesticks away from the .9550 psychological handle, which has been holding as support for the pair since October 2016. And now that stochastic is lollygagging in the oversold area, I think a lot of bulls and bears will be watching for a bounce.
Fundamentally, there’s still not a lot of reason to buy the Greenback. Higher equity prices, a hawkish FOMC statement, and Trump’s tax law haven’t translated to extended dollar strength yet. Meanwhile, worries over a government shutdown have kept dollar bulls in the sidelines.
This doesn’t mean that there’s no hope for the dollar, however. As Pip Diddy often points out, the euro and franc usually move in tandem.
So, with Angela Merkel facing one snag after another in her coalition efforts and Mario Draghi possibly tempering ECB tightening expectations in the next couple of days, there’s a good chance that the dollar will soon get a reprieve against the euro and the franc.
Before you buy USD/CHF like there’s no tomorrow, take note that there are a lot of potential resistance areas between the .9550 support and the 1.0300 previous highs. This means that, unless I plan to hold this one as a REALLY long-term trade, then I’ll have to watch out for possible reversals within the wide range.
In any case, I’ll be on the lookout over the next couple of days for a possible long entry. Think it will still hit .9550? Maybe lower? Or should I consider buying at .9600 already?
Feel free to share your two cents! 🙂
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