The USD/CHF pair had very little reaction to the nonfarm payroll numbers, as we continue to tread water near the 0.9250 handle. The area of course is the 50% Fibonacci retracement from the massive selloff after the Swiss National Bank got involved in the currency markets and suggested that the currency peg was over. Because of this, I do not have any interest in selling the Swiss franc, so I am only looking to short the Swiss franc related pairs. That being the case, I am looking for a set up in this pair, although I recognize of the US dollar of course is going to be stronger than other currencies such as the Euro. On the other hand, that gives is more stability in this market which of course is easier to take than the volatility we could see in something like the EUR/CHF pair.
Being patient will be crucial
I believe that being patient is exactly what is going to need to be done in order to take advantage of this market. If we broke down below the 0.92 handle, I would go ahead and start selling as sooner or later we should go down to the 0.85 level and that of course is quite a nice trade. On the other hand though, we could break out to the upside and I would be even more interested in the market at that point as we should head to the 0.95 level, the next major resistance barrier.
What I like about that resistance barrier is the fact that it is the 61.8 Fibonacci level, which of course is going to attract traders by itself. On top of that is the fact that it was once significant support, and now it should end up being significant resistance. I don’t see any reason why the sellers will come in at that point in time in full force. It’s probably only a matter time before the selloff, if you can only wait for the initial move lower.
