USD/CHF breaking out?

With the Dollar Index breaking to a new 2019 high today and risk assets remaining generally supported, demand for haven assets has fallen further.

With the Dollar Index breaking to a new 2019 high today and risk assets remaining generally supported, demand for haven assets has fallen further. Gold has broken key support in the $1485 region, triggering a cluster of stops sitting below than handle to create panic selling. Meanwhile, the USD/JPY has remained above the 108 handle, thanks not only to a firmer US dollar, but a weak yen too with the likes of GBP/JPY and CAD/JPY rising. Meanwhile the other key haven currency – the Swiss franc – has weakened too, falling even against the yen. Consequently, the USD/CHF is one where the dollar bulls are eying closely for a breakout.

In fact, the USD/CHF has broken above the 200-day average again. Will it be third time lucky? In the previous two occasions, the breakout only lasted at most for a day, before selling pressure ensued. This time could be different given the widespread dollar strength and judging by the bullish characteristics of price action as well. On that note, the bulls will be pleased to see that Friday’s bearish engulfing candle completely failed to lure new sellers in. With the bears trapped now, any-test of Friday’s high around 0.9950 could see these participants cover their bets, adding to the buying pressure. So, 0.9950 is the most important short-term support level to watch now. But if this level fails to hold and price subsequently goes below Friday’s low at 0.9890 then in that case, the bullish setup would become invalidated again. But for now, the path of least resistance remains to the upside and a rally beyond parity looks imminent.  

Source: eSignal and

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account