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Home ANALYSIS

USDCHF tests swing area after run above 50% finds sellers

A.R Chowdhury by A.R Chowdhury
April 6, 2022
Reading Time: 4 mins read
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USDCHF tests swing area after run above 50% finds sellers

USDCHF

USDCHF trades above swing area

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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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in trading yesterday, initially moved lower but found support buyers near it’s 100 day MA (lower overlayed blue line in the chart below).

The risk focused buyers (risk could be defined and limited) against that key MA, were rewarded after Fed’s Brainard spoke with more hawkish undertones. The price moved above the 200 hour MA (green line) but stalled near the 38.2% and a multi tested swing area between 0.9293 and 0.9296.

Today, after a modest dip to start the new trading day, the price of the USDCHF pushed higher to the low of another swing target between 0.9313 and 0.9319. After a final test of the lower swing area and 38.2% held support, the price based and pushed higher. The move took the price above the 50% at 0.93268 to a high at 0.9349.

For the most of the London session, the USDCHF has chopped up and down, BUT, the low has been finding support (this time) against the high of the aforementioned swing area between 0.9313 to 0.9319. The current price is trading right around the 50% level.

If the pair can now hold the 0.9313 to 0.9319 area, the buyers can be comfortable. A move below would likely have buyers turn to sellers. That level is the barometer for buyers and sellers going forward. For now, the level is holding giving the buyers the stronger hand (with work to do above the 50% retracement level).

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A.R Chowdhury

A.R Chowdhury

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