In a post yesterday (“USDCHF moves down toward lower target area”), I spoke to the USDCHF
USD/CHF
The USD/CHF is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Swiss franc of Switzerland (code CHF). The pair’s exchange rate indicates how many Swiss francs are needed in order to purchase one US dollar. For example, when the USD/CHF is trading at 1.2500, it means 1 US dollar is equivalent to 1.25 Swiss francs. The US Dollar (USD) is the world’s most traded currency, whilst the Swiss franc (CHF) is the world’s sixth most traded currency, resulting in a very liquid pair, with tight spreads, often staying within the 0 pip to 2 pip spread range on most forex brokers. Even though the Swiss franc might not be as liquid as the euro or yen, the USD/CHF currency pair is still liquid enough to be known as the fourth major. Trading the USD/CHF has its advantages and disadvantages. The main advantage being, a lot of traders often prefer to invest in the Swiss franc when economic or political instability is lurking.This is due to Switzerland traditionally being known as a safe haven, as it generally remains neutral and silent on many major geopolitical events, for example it never participates in wars. These investments can trigger large swings for traders, who may capitalize on such moves. The main disadvantage is that the US dollar is the world’s reserve currency.Thus, traders also can flock to the USD, trying to ascertain which currency is more likely to be embarked upon can prove tough at times. USD/CHF Still Living in Shadows of 2015The USD/CHF otherwise is seen as one of the lesser volatile pairs, with a tendency to follow the Euro, hence the negative correlation between it and the EUR/USD.The currency pair will forever be tethered to the events of January 2015 with the Swiss National Bank (SNB) Crisis which roiled currency markets.In this instance, the SNB abruptly decided to abandon the Swiss franc (CHF) currency peg with the euro, convulsing markets.
The USD/CHF is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Swiss franc of Switzerland (code CHF). The pair’s exchange rate indicates how many Swiss francs are needed in order to purchase one US dollar. For example, when the USD/CHF is trading at 1.2500, it means 1 US dollar is equivalent to 1.25 Swiss francs. The US Dollar (USD) is the world’s most traded currency, whilst the Swiss franc (CHF) is the world’s sixth most traded currency, resulting in a very liquid pair, with tight spreads, often staying within the 0 pip to 2 pip spread range on most forex brokers. Even though the Swiss franc might not be as liquid as the euro or yen, the USD/CHF currency pair is still liquid enough to be known as the fourth major. Trading the USD/CHF has its advantages and disadvantages. The main advantage being, a lot of traders often prefer to invest in the Swiss franc when economic or political instability is lurking.This is due to Switzerland traditionally being known as a safe haven, as it generally remains neutral and silent on many major geopolitical events, for example it never participates in wars. These investments can trigger large swings for traders, who may capitalize on such moves. The main disadvantage is that the US dollar is the world’s reserve currency.Thus, traders also can flock to the USD, trying to ascertain which currency is more likely to be embarked upon can prove tough at times. USD/CHF Still Living in Shadows of 2015The USD/CHF otherwise is seen as one of the lesser volatile pairs, with a tendency to follow the Euro, hence the negative correlation between it and the EUR/USD.The currency pair will forever be tethered to the events of January 2015 with the Swiss National Bank (SNB) Crisis which roiled currency markets.In this instance, the SNB abruptly decided to abandon the Swiss franc (CHF) currency peg with the euro, convulsing markets. Read this Term support being approached near the rising 200 bar moving average on the 4 hour chart, and also a swing area between 0.9848 and 0.9873.
The price ended up moving down toward that 200 bar moving average dipping briefly below the level at 0.9844 (at the time). The low price ticked to 0.98415 before bouncing higher (close enough).
The inability to find momentum below the moving average helped to turn sellers into buyers, and the price ended up bouncing to and through the broken 38.2% retracement at 0.98919. Further buyer momentum, took the price up to a swing area between 0.9917 and 0.99299. The high price reached 0.9927 before rotating back to the downside.
The technical levels have done a good job of defining the range.
What we know is support is at the 200 bar moving average on the 4-hour chart and lower swing area (between 0.9848 to 0.9873).
Meanhwhile, resistance at the higher swing area (see green numbered circles) is the topside target now.
The current price trades between those levels and rate near the 38.2% retracement at 0.9892.
Flip a coin here.
Buyers who leaned against the 200 bar MA below are happy.
Seller who sold against the 100 bar MA earlier this week and against the swing area today are happy.
The battle is on. The happy traders will be battling for control above or below the 38.2% and looking for the next shove either above the topside targets, or below the lower targets.
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