After retesting the underside of 0.99 during the early hours of yesterday’s session, the USD/CHF fell to a low of 0.9846. Leaving the H4 support at 0.9837 unchallenged, the pair reclaimed earlier losses and revisited 0.99.
Right now, we believe this is a sellers’ market. Here’s why:
• Weekly price shows room to drive as far south as weekly support coming in at 0.9770. • Daily price recently crossed below support at 0.9896 (now acting resistance). • H4 price is, as mentioned above, retesting 0.99. Alongside this, however, we can also see that 0.99 fuses with a H4 channel support-turned resistance taken from the low 0.9939 and a H4 38.2% Fib resistance.
Suggestions: We have entered at 0.9896, with our stop-loss order located at 0.9915, a few pips above yesterday’s high. The first take-profit target, should the trade play out, is the aforementioned H4 support level.
Data points to consider: US unemployment claims, Import prices m/m and Philly Fed manufacturing index at 1.30pm; Industrial production m/m and capacity utilization rate at 2.15pm; FOMC member Kaplan speaks (timing tentative); FOMC member Brainard speaks at 8.45pm; Gov. Board member Maechler speaks at 5pm GMT.
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Not where we wanted price to trade. Looks like we may get tapped here.