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Home ANALYSIS

USDCHF sellers had a shot today. It did not go well.

A.R Chowdhury by A.R Chowdhury
March 18, 2022
Reading Time: 5 mins read
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USDCHF sellers had a shot today. It did not go well.

USDCHF

USDCHF 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.
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peaked this week on Wednesday at 0.94594, but stalled ahead of the swing high from 2021 (from April) at 0.9472. The price closed lower on that day and again yesterday. Today the price is also lower with more up and down trading.

Looking at the daily chart, the price yesterday – and for most of the day today – has been able to stay below a swing area between 0.9365 and 0.93748. I would expect that area to be a barometer for the buyers and sellers. Move above is more bullish, stay below is more bearish.

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What is worrying on the downside, is that drilling to the hourly chart below, the price action today shows that the sellers had their shot below a cluster support, and it did not go all that well.

Specifically, the price was able to fall below its 200 hour moving average (green line) at 0.93433, the 38.2% retracement of the move up from the March 1 low at 0.9341, and also the low from yesterday’s trade at 0.93346. The breaking of the cluster support should have led to further downside momentum, but instead saw a snapback rally.

The corrective high has remained below the high for the day and also comfortably below the 100 hour moving average above at 0.9387 (the high price reached 0.9372 which is below the high for the day at 0.93818). So it is not all so bad for the sellers at least for the time period.

However a move back below the aforementioned cluster of support levels would still be needed to increase the bearish bias going forward.

USDCHF

USDCHF trade between 100/200 hour moving averages

What would hurt the bears comfort would be a move back above 0.93748 from the daily chart, and also back above the 100 hour moving average at 0.93873. Breaks of those levels would put a dagger in the hearts of the sellers looking for more downside momentum.

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A.R Chowdhury

A.R Chowdhury

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