USD/CHF tests potential resistance as dollar squeezes higher
Fawad Razaqzada October 23, 2019 5:00 PM
Short covering has helped the US dollar regain its poise in this first half of the week, underpinning the likes of the USD/CHF and undermining the likes of the EUR/USD. But fundamentally not a lot has changed to support the greenback. The buck may therefore come under renewed pressure in the coming days once the impact of short covering fades.
The USD/CHF was in fact probing a key technical area around 0.9905/15 at the time of writing. This area was the last low made before last week’s breakdown that finally pushed rates below the 200-day average and the bullish channel. Once support, the 0.9905/15 range has the potential to turn into resistance. If we see some bearish price action here, then rates could resume lower and head below the 0.9850 support over the coming days.
However, if the squeeze continues, then the next pivotal area to watch is at 0.9945/55, which was the base of the breakdown and where the 200-day comes into play.
Source: eSignal and FOREX.com.
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 Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.