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01.06.2016 08:34 -
USDCHF is probably the purest US dollar play on offer
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Background
USDCHF is probably the purest US dollar play at the moment as the Swiss National Bank is keeping its head down, and economic data releases out of Switzerland are not creating any waves.
The SNB is holding three month Swiss Libor tightly around -0.75%, right in the middle of its trading band, probably waiting for Thursday’s European Central Bank meeting before considering any fine tuning.
Meanwhile US money markets have backed off a June or July rate hike a touch, the odds being about 25% and 60% respectively. Perhaps that’s because the Federal Reserve’s inflation benchmark, the price index of Personal Consumption Expenditures, only matched expectations yesterday.
Today’s ISM Manufacturing survey will be closely watched, given weakness in other manufacturing indicators lately. But Friday’s employment report will be the big test for the dollar.
Management and risk description
From an Elliott Wave perspective, on its May 3 low of 0.9445, USDCHF completed a complex “Double Three” corrective structure. Since then, from a classical charting stand point, USDCHF has also completed a bullish Descending Wedge chart pattern (refer daily chart below).
In the short term, whilst today holding support at 0.9915/0.9885, yields the resumption of uptrend above 0.9955 resistance toward the 1.0080 level (see daily cart below). A loss of 0.9885 support however, would probably trigger a corrective selloff back toward the late 0.9700’s.
Parameters
Entry: Today, there is a short term opportunity to Buy USDCHF around the 0.9920 level (directly above .9955 resistance however, cancels, as not prepared to chase the market higher).
Stop: 0.9879 initially.
Target: 1.0067.
Time horizon: allow a few days for target to be met.
цитирайUSDCHF is probably the purest US dollar play at the moment as the Swiss National Bank is keeping its head down, and economic data releases out of Switzerland are not creating any waves.
The SNB is holding three month Swiss Libor tightly around -0.75%, right in the middle of its trading band, probably waiting for Thursday’s European Central Bank meeting before considering any fine tuning.
Meanwhile US money markets have backed off a June or July rate hike a touch, the odds being about 25% and 60% respectively. Perhaps that’s because the Federal Reserve’s inflation benchmark, the price index of Personal Consumption Expenditures, only matched expectations yesterday.
Today’s ISM Manufacturing survey will be closely watched, given weakness in other manufacturing indicators lately. But Friday’s employment report will be the big test for the dollar.
Management and risk description
From an Elliott Wave perspective, on its May 3 low of 0.9445, USDCHF completed a complex “Double Three” corrective structure. Since then, from a classical charting stand point, USDCHF has also completed a bullish Descending Wedge chart pattern (refer daily chart below).
In the short term, whilst today holding support at 0.9915/0.9885, yields the resumption of uptrend above 0.9955 resistance toward the 1.0080 level (see daily cart below). A loss of 0.9885 support however, would probably trigger a corrective selloff back toward the late 0.9700’s.
Parameters
Entry: Today, there is a short term opportunity to Buy USDCHF around the 0.9920 level (directly above .9955 resistance however, cancels, as not prepared to chase the market higher).
Stop: 0.9879 initially.
Target: 1.0067.
Time horizon: allow a few days for target to be met.
