Over the past 24 hours we have seen a massive shift in risk sentiment and the result for the broader currency market was volatility. Does this move stand as a temporary reversal or a reestablished trend? Regardless of which category you fall into, it is a speculative bet that poses an ongoing threat to potential range setups. The fundamental and technical buffers for USDCHF are about as good as they come.
 | Why Would USDCHF Hold a Range? · Levels to Watch: -Range Top: 1.1725 (Trend Channel) -Range Bottom: 1.1450 (Trend, Fib, SMA, Pivot) · Like the EURCHF setup from yesterday, this pair is somewhat buffered to the all-consuming influence of risk sentiment. However, instead of tight economic ties, these two currencies are instead both considered key safe havens for the currency market. At the same time, the dollar has acted on this fundamental trait more readily, leading to volatile responses to shifts in risk trends. Scheduled event risk becomes a larger issue next week. · USDCHF is not carving the traditional, horizontal congestion pattern. This pair has developed a rising trend channel pattern since reversing the sudden plunge back in mid-to-late March. Resistance is defined by little more than the top of the channel formation; but short-term technicals are a little more encouraging. Both boundaries are in flux. Suggested Strategy · Short: Half-sized entry orders will be placed at 1.1680 which is just above an intraday level. · Stop: An initial stop of 1.1760 covers yesterday’s highs, but not much more. To secure profit, move the stop on the second lot to breakeven when the first target hits. · Target: The first objective equals risk (80) at 1.1600 and the second target will be 1.1520. |
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