Market News & Analysis

Top Story

USD/CHF getting Clobbered

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.   

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.