USD/CHF getting Clobbered

USD/CHF has quietly been getting hit today, down 0.5%

With all the talk of a Brexit deal getting done today, USD/CHF has quietly been getting hit today, down 0.5% and breaking down through some major support levels.  Although the DXY got hit at the time the Brexit deal was announced, USD/CHF has been selling off since yesterday, where the pair failed to take out the all-important psychological 1.0000 level.

USD/CHF has been in an uptrend since putting in lows on August 13th.  The pair retraced to the 61.8% Fibonacci level from the high on April 26th to the previously mentioned lows.  However, it failed to close above those levels at 1.0017, and for that matter, the 1.0000 level as well.  Today the pair not only broke through the bottom trendline of the rising channel at .9950, but also took out prior lows and horizontal support near .9900!

Source: Tradingview, City Index

On a 240-minute time frame, USD/CHF has broken lower out of a rising wedge and, for the moment, has held the 38.2% retracement from the lows of August 13th to the highs from October 3rd at .9888.  The target for a rising wedge is a 100% of the move higher, which is near .9660.  Note that RSI is moving into oversold territory, however it is still pointing lower. 

Source: Tradingview, City Index

If we look at a short term 60-minute timeframe, USD/CHF took out the .9905 horizontal support, and the RSI is below 20.  First resistance now comes in at that .9905 level.  Above that, resistance comes in the rising trendline (on all timeframes) and horizontal resistance at .9960, and then the all-important psychological level of 1.0000.  A close about that level may bring bulls back into the market. Next support level is the 50% retracement level from the 240-minute chart at .9844,  which is also horizontal support. 

Source: Tradingview, City Index

Just as a reference, the Average True Range for USD/CHF on a daily timeframe is 57 pips.  (see indicator at bottom of daily chart).  This means that the pair trades in an average trading range (high to low) over the last 14 days of roughly 57 pips. Today’s range is 67 pips as of the time of this writing, and down 64 pips on the day.  This indicates there may be a bounce in the short-term.   

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.