During Tuesday’s early European trading session, the USD/CHF currency pair failed to stop its Asian session bearish bias and dropped further near 0.9223 level, mainly due to the broad-based U.S. dollar selling bias, triggered by the cautious mood of traders ahead of the U.S. presidential debate. Moreover, the upbeat market sentiment, backed by the positive coronavirus (COVID-19) vaccine news, also weighed on the safe-haven U.S. dollar, which keeps the currency pair under pressure. Currently, the USD/JPY currency pair is currently trading at 0.9224 and consolidating in the range between 0.9222 – 0.9252.
However, the market trading sentiment extended its Monday’s upbeat performance and continue to flash d green during the European session on the day. The market was being supported by the risk-positive headlines from America and the European Union (E.U.). Moreover, the coronavirus (COVID-19) vaccine’s hopes also kept the bulls hopeful on the day. It is worth mentioning that the U.S. pharmaceutical giant Johnson and Johnson Inc COVID-19 vaccine trials earlier showed a robust immune response to the coronavirus with a single dose in the early trial stages. This, in turn, boosted market trading sentiment and dragged the currency pair down by undermining the safe-haven U.S. dollar.
On the other hand, the U.S. Democrats showed a willingness to alter previous proposals, while saying that the deadlock over the much-awaited stimulus talks seems to break anytime. Meanwhile, the U.S. House Speaker Nancy Pelosi recently said that we have made critical additions and reduce the bill’s cost by shortening the time covered for now. This eventually boosted the hopes of the much-awaited coronavirus (COVID-19) stimulus package, which keeps the market trading sentiment positive and helps the currency pair limit its deeper losses by undermining the safe-haven Swiss Franc.
Despite the hopes of further stimulus., the broad-based U.S. dollar still flashing red during the European session amid market risk-on sentiment. On the other hand, traders’ cautious mood ahead of Tuesday’s U.S. presidential election debate between President Donald Trump and Democratic candidate Joe Biden also weighed on the U.S. dollar. Although, the gains in the U.S. dollar keep the currency pair down. Looking ahead, the market traders will keep their focus on headlines concerning Brexit, pandemic, and the U.S. Presidential Election, which may offer important clues. It’s worth mentioning that the 1st-round of the U.S. President Election debate is expected to use American President Donald Trump’s tax payments as a fresh obstacle, which may push the U.S. dollar down.
Daily Support and Resistance
S1 0.9038
S2 0.9109
S3 0.9154
Pivot Point 0.9181
R1 0.9225
R2 0.9252
R3 0.9323
The USD/CHF pair entered the overbought zone during the Asian session but soon started forming a bearish setup below a strong resistance level of 0.9295 level. The closing of the candle below 0.9295 level has driven strong selling until the 0.0222 level. An upward trendline is likely to support the USD/CHF pair at 0.9211 level, and if it closes over 0.9211 level, we may have a bullish reversal. Check out a trading plan below…
Entry Price – Sell 0.92306
Stop Loss – 0.92706
Take Profit – 0.91906
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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