During Tuesday’s Early Asian trading session, the USD/CHF extended its overnight losses and remain depressed around just above the 0.9167 support level mainly due to the broad-based U.S. dollar weakness. However, the prevalent downtrend in the greenback is mainly tied to the upbeat activity numbers from the U.S., China, and Europe, which rekindled economic recovery hopes and kept market trading sentiment positive. Moreover, the political uncertainty in the U.S. also weighs on the already weaker U.S. dollar, which adds further burden around the currency pair.
Despite the intensified Sino-US tussle and coronavirus (COVID-19) woes, the market trading sentiment managed to stop its previous negative performance and started to gain some positive traction during the early Asian session on the day perhaps due to the upbeat activity numbers from the U.S., China, and Europe, which rekindled economic recovery hopes. Moreover, the market trading sentiment got an additional lift from the positive developments surrounding the Brexit talks between the U.K. and the European Union (E.U.), which in turn, provided an instant boost to the market trading sentiment and undermined the safe-haven assets including the safe-haven U.S. dollar.
Despite the upbeat U.S. data, the broad-based U.S. dollar remained depressed as the investors continue to sell U.S. dollars on the back of the upbeat market sentiment. Moreover, the losses in the U.S. dollar could also be associated with political uncertainty in the U.S. ahead of U.S. elections. However, the losses in the U.S. dollar could be considered as the major factor that kept the currency pair under pressure. Meanwhile, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies dropped to 93.977 to 93.705.
Technically, the USD/CHF pair has entered the overbought zone at the 0.9204 level and below this, the market has initiated the retracement/correction in the USD/CHF pair. Therefore, we have opened a sell trade below 0.9200 area to target quick 40 pips—checkout out a trading plan below.
Entry Price – Sell 0.91809
Stop Loss – 0.92209
Take Profit – 0.91409
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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