APPROACHING IMPORTANT RESISTANCE AREA

UntitledUSDCHF2

  1. Since that inflection, we’ve seen USD-weakness permeate across markets as investors have been pricing-out that first rate hike from the Fed; and accordingly USD/CHF has gyrated below support levels at .9681 and .9600. But the fact that USD/CHF hasn’t fallen further, as dollar-weakness appeared more pronounced against other currencies, highlights the fact that this could be a prime-candidate for reversal plays in the US Dollar as the Swiss National Bank is doing what many feel the Federal Reserve should be doing (negative rates). This could lead to additional Franc-weakness as the debate around US-rate hikes continues.

2. The near-term issue is the ramp higher in prices that we’ve seen in the wake of this morning’s European Central Bank meeting, in which Mario Draghi hinted towards an expansion of the economy’s QE program. This leaves the current setup far from any nearby support levels that can be used for stop management. For traders that do want to get long USD/CHF, confirmation of this recent bullish-run could be seen if we break through this confluent resistance and the top-end of this symmetrical wedge. At that point, we might be able to proffer a long-term trend in the pair.

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