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Home ANALYSIS

USDCHF pushes to a new session high

A.R Chowdhury by A.R Chowdhury
March 15, 2022
Reading Time: 5 mins read
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USDCHF pushes to a new session high

USDCHF

USDCHF trade above a key swing area on the daily chart

The  USDCHF 
USD/CHF

The USD/CHF is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Swiss franc of Switzerland (code CHF). The pair’s exchange rate indicates how many Swiss francs are needed in order to purchase one US dollar. For example, when the USD/CHF is trading at 1.2500, it means 1 US dollar is equivalent to 1.25 Swiss francs. The US Dollar (USD) is the world’s most traded currency, whilst the Swiss franc (CHF) is the world’s sixth most traded currency, resulting in a very liquid pair, with tight spreads, often staying within the 0 pip to 2 pip spread range on most forex brokers. Even though the Swiss franc might not be as liquid as the euro or yen, the USD/CHF currency pair is still liquid enough to be known as the fourth major. Trading the USD/CHF has its advantages and disadvantages. The main advantage being, a lot of traders often prefer to invest in the Swiss franc when economic or political instability is lurking.This is due to Switzerland traditionally being known as a safe haven, as it generally remains neutral and silent on many major geopolitical events, for example it never participates in wars. These investments can trigger large swings for traders, who may capitalize on such moves. The main disadvantage is that the US dollar is the world’s reserve currency.Thus, traders also can flock to the USD, trying to ascertain which currency is more likely to be embarked upon can prove tough at times. USD/CHF Still Living in Shadows of 2015The USD/CHF otherwise is seen as one of the lesser volatile pairs, with a tendency to follow the Euro, hence the negative correlation between it and the EUR/USD.The currency pair will forever be tethered to the events of January 2015 with the Swiss National Bank (SNB) Crisis which roiled currency markets.In this instance, the SNB abruptly decided to abandon the Swiss franc (CHF) currency peg with the euro, convulsing markets.

The USD/CHF is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Swiss franc of Switzerland (code CHF). The pair’s exchange rate indicates how many Swiss francs are needed in order to purchase one US dollar. For example, when the USD/CHF is trading at 1.2500, it means 1 US dollar is equivalent to 1.25 Swiss francs. The US Dollar (USD) is the world’s most traded currency, whilst the Swiss franc (CHF) is the world’s sixth most traded currency, resulting in a very liquid pair, with tight spreads, often staying within the 0 pip to 2 pip spread range on most forex brokers. Even though the Swiss franc might not be as liquid as the euro or yen, the USD/CHF currency pair is still liquid enough to be known as the fourth major. Trading the USD/CHF has its advantages and disadvantages. The main advantage being, a lot of traders often prefer to invest in the Swiss franc when economic or political instability is lurking.This is due to Switzerland traditionally being known as a safe haven, as it generally remains neutral and silent on many major geopolitical events, for example it never participates in wars. These investments can trigger large swings for traders, who may capitalize on such moves. The main disadvantage is that the US dollar is the world’s reserve currency.Thus, traders also can flock to the USD, trying to ascertain which currency is more likely to be embarked upon can prove tough at times. USD/CHF Still Living in Shadows of 2015The USD/CHF otherwise is seen as one of the lesser volatile pairs, with a tendency to follow the Euro, hence the negative correlation between it and the EUR/USD.The currency pair will forever be tethered to the events of January 2015 with the Swiss National Bank (SNB) Crisis which roiled currency markets.In this instance, the SNB abruptly decided to abandon the Swiss franc (CHF) currency peg with the euro, convulsing markets.
Read this Term
moved above a swing area on the daily chart between 0.9365 and 0.9375 during trading yesterday. Today, the pair’s low stalled the price between that area and 0.9370. The price has moved higher and trades right around the 0.9400 level after reaching a new session high at 0.9411.

Holding the swing area (see red numbered circles in the chart above) is a key barometer on the daily chart. Stay above is more bullish going forward. The swing high from 2021 reached 0.9472. That would be an upside target on further upside momentum in this currency pair.

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Drilling to the hourly chart below, the price action today has been up and down. The initial move to the upside in the Asian session reached 0.9410, but then fell sharply to the low at 0.93709. As mentioned above, that low did stall within the swing area on the daily chart between 0.9365 and 0.9375. The buyers held onto control. That is bullish.

Now…. on the flip side, the recent high did take out the earlier high for the day, BUT only by a pip or so.

That lack of momentum may end up being a disappointment from a technical perspective. If the buyers cannot push above the highs in the next few hours, there could be a rotation back toward the aforementioned swing area from the daily chart on the disappointment.

However for the time period, I remain more bullish on the pair’s ability to hold support against the key swing area on the daily chart, with an eye toward a new high met with momentum.

USDCHF

USDCHF trade above a key swing area on the daily chart

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A.R Chowdhury

A.R Chowdhury

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