Today in the European trading session, the USD/CHF currency pair stopped its previous session bullish momentum. They edged lower below the 0.9150 level, mainly due to the risk-off market sentiment, triggered by lack of additional U.S. fiscal stimulus and the US-China tussle, which eventually underpinned the safe-haven Swiss franc and kept the currency pair under pressure. Moreover, the market trading sentiment was further pressured by the downbeat reports that Johnson & Johnson paused the coronavirus vaccine trails, which also burdened the currency pair.
Across the pond, the bearish tone around the currency pair could also be associated with the fears of national lockdowns in Europe, which add further burden to the trading sentiment and dragged the currency lower. On the contrary, the broad-based U.S. dollar strength, backed by the market risk-on tone, becomes the key factor that kept the lid on any additional losses in the pair.
However, the equity market has been flashing red since the day started. Although, the reason could be associated with the major negative catalysts, including the further delay in the much-awaited coronavirus (COVID-19) relief package and the resurgence of COVID-19 new cases in the U.S. and Europe, which keep fueling the worries over the global economic growth. Apart from this, the fears of the U.K. and the European Union’s (E.U.) Brexit talks and the latest pause in the COVID-19 vaccine trials also add pessimism around the market trading sentiment. This, in turn, provided a boost to the safe-haven Swiss Fran and exerted some additional pressure on the currency pair.
As in result, the broad-based U.S. dollar managed to keep its gains throughout the Asian session as the traders still cheering the risk-off marker mood. However, the U.S. dollar gains seem relatively unaffected by the intensifying U.S. political uncertainty. However, the incoming polls suggest a clear-cut presidential victory for the Democrat candidate Joe Biden, which might cap further upside momentum for the U.S. dollar. However, the U.S. dollar gains become the key factor that helps the currency pair limit its more profound losses. Simultaneously, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies rose by 0.01% to 93.550 by 10:12 PM ET (2:12 AM GMT).
Looking forward, the traders will keep their eyes on the release of the US PPI figures for September. Meanwhile, FOMC members and the RBNZ policymaker’s scheduled speeches will key to watch for some meaningful trading direction. Apart from this, the ongoing drama surrounding the US-China relations and updates about the U.S. stimulus package will not lose their importance.
Daily Support and Resistance
S1 0.9006
S2 0.9069
S3 0.9109
Pivot Point 0.9132
R1 0.9172
R2 0.9195
R3 0.9258
The USD/CHF is trading with a bearish bias at 0.9125, holding below an immediate resistance level of 0.9157 resistance area. Closing of candles below this level may drive selling bias until the 0.9086 level. On the two-hourly timeframes, the USD/CHF pair has formed a downward channel that is likely to drive selling bias, and that’s one reason we opened a selling signal in the USD/CHF pair. Here’s a trading plan…
Entry Price – Sell 0.91392
Stop Loss – 0.91792
Take Profit – 0.90992
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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