USD/CHF can’t seem to bust through a key technical resistance zone!
Is it time to short the Greenback against its fellow safe haven?
We’re taking a closer look at the daily chart!
USD/CHF 1-hour Forex Chart by TradingView
The U.S. dollar can’t seem to sustain gains above the .8700 psychological handle against the Swiss franc despite the U.S. 10-year Treasury yield extending its gains on Monday.
We don’t have to look too far for answers. Optimism for U.S. equities is limiting U.S. dollar demand, while uncertainty over the results of the U.S. elections may be keeping some traders from buying USD.
Meanwhile, the relative weakness of the Japanese yen makes the Swiss franc a preferable alternative to the U.S. dollar in case of a risk and USD-averse trading environment.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the Swiss franc, it’s time to check out the economic calendar and stay updated on daily fundamental news!
USD/CHF, which has shot up sharply in October, seems to have found a ceiling at the .8700 psychological handle.
And why not? The area is right around the R2 (.8635) Pivot Point line and is not far from the 38.2% Fibonacci retracement mark of the downswing from .9200 this year.
Bearish candlesticks and then sustained trading below .8700 exposes USD/CHF to a possible move down to the R1 (.8545) Pivot Point area if not the .8500 psychological level.
But what if USD/CHF bulls are just taking a breather?
If USD/CHF makes another run for .8700 and successfully and consistently trades above the resistance zone, we could be looking at a pop to the .8800 if not the .8900 areas of interest.
Whichever bias you end up trading, make sure you know the potential catalysts that may affect USD/CHF prices in the next few days!