FX: Is Swissy Still the Safe Haven Play? $USDCHF

It has been hardly a rollercoaster ride in FX this week. Trading ranges remain tight as the holidays are upon us, also the financial markets await the fiscal cliff and more importantly focus on the economy for 2013.

UNCHARTED EASING WATERS
With unlimited easing expected to persist from the United States, China, Japan, and Britain, we are entering unchartered territory. Currencies, equities and commodities remained propped higher by the limitless stimulus flowing in the global markets. This trend may persist in some markets, but possibly not all.

A LOOK BACK
Over the last several years, the Swiss franc has become a safe haven favorite trade during times of a weakening U.S. economy. Since trading at 1.8313, during the fall of 2000, the USD/CHF has been on a steady downward sloping trend that made a record low at .7072 during summer of 2011.

KEY LEVELS
The most recent bullish correction saw price fail at .9971 before steadily resuming its bearish stance. Since making a new 7-month low, price appears poised to continue its swing down. With the likelihood growing that the fiscal cliff will be resolved in time, a potential risk rally may put a pause in this trend continuation.

 

MoyaDec18.jpg

 

TRADE WATCH
If price breaks below .9130, downside support lies both at the psychological .9000 level and the bearish trend channel that started from the record high early last decade. A bounce back above .9200 may negate the initial move lower.

From Trader Planet

Edward J. Moya is the Chief Market Strategist for edmoya.com, an educational website for foreign exchange and commodity traders. He has over 15 years of investment industry experience in forex, stocks, options and futures. At edmoya.com, Mr. Moya writes daily currency and commodity analysis and has authored numerous articles on trading using both technical and fundamental analysis for major financial publications. He is a contributor of technical and fundamental analysis in currencies and commodities to SFO, Market News International, and Forex Factory.

Posted in Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.