Chart of The Day USDCHF
USDCHF Potential Reversal Zone & Probable Price Path
Trader sentiment was in an upbeat mood yesterday ahead of the outcome of the US elections (Presidential, House and Senate). This ‘risk on’ mood was reflected in solid gains for equity markets on both sides of the Atlantic. In Europe, the Euro Stoxx 50 gained 2.6%. Meanwhile at the closing bell on Wall Street last night, the S&P 500 was up 1.8% on the day. The Presidential election itself is proving much closer than the polls had suggested and is too close to call. Meanwhile, as expected the Democratic party are on course to retain the House. However, the Republican party is currently projected to hold onto control of the Senate. A final result on the Presidential election may not be known for a number of days. President Trump has already announced in a speech this morning that he plans to go to the Supreme Court in relation to the counting of votes. Therefore, the scene is set for a contested outcome, which is a negative for risk appetite.
European equity markets have opened lower this morning amid the uncertainty over the election outcome, although they continue to fluctuate between loss and gain on the day. From a currency viewpoint, there was a lot of volatility in the dollar overnight as election results started to come in. Overall, the reserve currency is stronger over this period although it is trapped in the midpoint of the extended overnight range.
From a technical and trading perspective, the USDCHF like many major FX pairs has experienced a volatile overnight session after initially breaking lower from yesterday's close buyers stepped in as Trump numbers started to improve, however, fresh supply has traded in the market this morning as Bidens chances of securing the Electoral college have caught a decent bid (it is noteworthy that so far we have tested and held weekly projected range support and resistance) . From a trend perspective, pressure remains to the downside, as such bearish exposure should be rewarded on a breach of the overnight lows through .9085, versus the .9210 pivot there is a downside equality objective that coincides with projected descending trendline support sited at .8944
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!