USDCHF testing major resistance, remain bearish
Sell below 1.0090. Stop loss at 1.0118. Take profit at 1.0033.
Reason for the trading strategy (technically):
We remain bearish below 1.0090 resistance (Fibonacci retracement, horizontal pullback resistance) where we expect a reaction from for a drop to 1.0033 support (Fibonacci retracement, horizontal support).
Stochastic (21) is seeing strong resistance at the 94% level.
Reason for the trading strategy (fundamentally):
The major news item today affecting USD is the Gross Domestic Product (GBP) which measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy's health. If the actual release is better than the forecast, that means it is good for the currency and we can expect USD to strengthen. However, if the actual release is less than the forecast, that means it is bad for USD and we can expect USD to weaken. Our current forecast is for a rise from 1.9% to 2.1% which means we could expect a stronger USD, this goes against our bearish USDCHF view, hence, it is best to exercise caution on this trade.
The other major news event driving the USD today is the U. of Michigan Confidence. It assesses consumer confidence regarding personal finances, business conditions and purchasing power based on hundreds of telephone surveys. A low or falling University of Michigan Sentiment value is considered an early indicator of an economic downturn. We’re expecting a higher value which means a stronger USD, which goes against our bearish USDCHF view today too.
Reason for the trading strategy (technically):
We remain bearish below 1.0090 resistance (Fibonacci retracement, horizontal pullback resistance) where we expect a reaction from for a drop to 1.0033 support (Fibonacci retracement, horizontal support).
Stochastic (21) is seeing strong resistance at the 94% level.
Reason for the trading strategy (fundamentally):
The major news item today affecting USD is the Gross Domestic Product (GBP) which measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy's health. If the actual release is better than the forecast, that means it is good for the currency and we can expect USD to strengthen. However, if the actual release is less than the forecast, that means it is bad for USD and we can expect USD to weaken. Our current forecast is for a rise from 1.9% to 2.1% which means we could expect a stronger USD, this goes against our bearish USDCHF view, hence, it is best to exercise caution on this trade.
The other major news event driving the USD today is the U. of Michigan Confidence. It assesses consumer confidence regarding personal finances, business conditions and purchasing power based on hundreds of telephone surveys. A low or falling University of Michigan Sentiment value is considered an early indicator of an economic downturn. We’re expecting a higher value which means a stronger USD, which goes against our bearish USDCHF view today too.
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