Buying The USD/CHF: Key Level At .9579

Safe-haven assets have certainly been a hot trade this week. As I mentioned during yesterday’s session, the USD/CHF is coming into an interesting technical area. Geopolitics and economic data are going to drive the Swissie for the next 24 hours. How do we trade it?

Convergence

Like I said yesterday, when technical levels come together to form support and resistance, good things are likely to happen. The long from the convergence zone is still technically valid. A stop under yesterday's low is a good out while we look for a better entry.

Currently, the USD/CHF is trading dead center of yesterday’s key area:

Wednesday’s USD/CHF Daily Chart

Of course, moving averages update in real time, so here is where those levels stand today:

USD/CHF Daily Chart-Setting Up A Long With Great Trade Location

There are a few important technical levels to be aware of:

• Currently, we are trading above last session’s low at .9611

• The 20 Day EMA has been updated to .9647

• Our 13 Day SMA now stands at .9579

• Key support areas beneath current trade are the 50% retracement at .9605 and 62% at .9565

In addition, tomorrow’s CPI releases for the U.S. will drive more participation to the market. The 8:30 AM EST release of the data is likely to bring some of our key levels into play.

The Trade: We are seeing compression in our convergence area. The best course of action is to let the market shake out and wait for an optimal entry.

Going long from the 13-Day SMA is the best long entry on the board. A buy at .9579 with a stop under the round number of .9550 gives a 1:1 ratio on a return to .9604. One can also put a 2:1 ratio in play, and look for an intermediate term rally back towards topside value at .9529.

It is unlikely that we get our price today during the U.S. Session. I look for the trade to go live during the European session or on the U.S. CPI release tomorrow.

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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