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USDCHF Technical Analysis – Back Above Ichimoku After US Elections


Nov.09.2016

USDCHF Technical Analysis - US Elections Aftermath

The US Elections took Ms. USA on a heck of a ride on Wednesday. USDCHF technical analysis shows the pair is back within its previous range. We may now be safe to take advantage of the market movements coming up. Read on for an IDDA approach to strategy development.

 

USDCHF Technical Analysis - Kiana Danial Forex Analysis USDCHF Technical Analysis - Kiana Danial Forex Analysis

Before Getting to USDCHF Technical Analysis...

The after effects of US election results which announce Donald Trump as president carried on well into Wednesday with an astonishing outcome: The US dollar actually started getting stronger across the board.

 

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One resaon behind this could be because other countries took the news harder than the US. Which resulted in a weaker currency on their end, ultimately pushing the USD higher. Another reason could be the fact the Donald avoided his usual rhetoric during his acceptance speech. Thich made the markets feel less fearful of his temperament. His speech was surprisingly graceful which may have relieved US investors a little bit.

USDCHF Technical Analysis | Back Above Ichimoku After US Elections

There was no shortage of volatility in USD crosses as US election results unfolded. After testing the strong pivot of 0.9550 on volatility, the USD/CHF pair ended the day at resistance pivot and 23% Fibonacci level of 0.9850 on Wednesday. USDCHF technical analysis on the daily chart shows the pair started off Thursday’s Asian session above the Ichimoku cloud which could indicate further bullish sentiment to follow.

 

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Meanwhile the prevailing Ichimoku cloud has turned up after four months of flatness. USD/CHF ended Wednesday above the cloud. However it so far remains within the medium-term range of 0.9850 - 0.9550. The longer term resistance levels are set at 0.9950 and parity in extension.

USDCHF Technical Analysis - Daily Chart Ichimoku Cloud USDCHF Technical Analysis - Daily Chart Ichimoku Cloud

The pair now has a thicker Ichimoku cloud to break below which could give the bears a harder challenge.

 

US Economic Outlook

Overall, the US economy appears to be in good shape. The rebound in Q3 GDP growth was good, although consumer spending did weaken a bit. Other than GDP growth, the most recent inflation readings are also kind of impressive. While NFP numbers have been missing expectations for three months, they are still above the 100K floor that many Fed officials are keeping an eye on. They’re therefore still relatively good.

With this, the next big thing out of the US could be a potential interest rate hike within 2016. The Fed said it has a high possibility in their November FOMC statement.

The Fed didn't mentioned the US presidential elections (and a Trump victory in particular) as a risk factor during the November FOMC statement. So with the shocking strength in USD after announcement of Trump presidency, Invest Divas are eager to know what the next Fed move is.

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Coming up...

On the economic calendar on Thursday the weekly US jobless claims are scheduled to be out at 1:30 PM GMT which could add on to the volatility.

On Friday The US will be on a bank holiday along with Canada and France. During the London session German Final CPI is scheduled to be out at 7 AM GMT followed by the UK Construction Output  at 9:30 AM. During the New York session Prelim UoM Consumer Sentiment will be out at 3 pM GMT. Bank of Canada's Governor Poloz speaks at 3:30 PM to end an incredibly volatile trading week.

Market Sentiment | USDCHF Technical Analysis After US Elections

Looking at the hourly chart for a short-term USDCHF technical analysis and market sentiment, we realize that the market participants are mainly exhausted and indecisive right at the pivot level.

USDCHF Technical Analysis - Hourly Chart Market Sentiment USDCHF Technical Analysis - Hourly Chart Market SentimentMarket sentiment may change on Thursday's New York session, so stay tuned on our Facebook page for my signals.

Trading Strategy | USDCHF Technical Analysis After US Elections

Putting the IDDA points together, here are potential trading strategies.

Bullish Scenario:

Depending on your risk tolerance, you could consider entering a bullish position upon a break above 0.9850. First target is set at 0.9950 while higher risk target is set at 1.0055.

Bearish Scenario:

If the pair fails to break above 0.9850, you could consider entering a short-term bearish position targeting the upper band of the Ichimoku cloud for a short-term trade.

 

A break below the cloud could open doors for the continuation of our medium-term range towards 0.9550.

Stay tuned for market updates and signals on our premium closed Facebook page. As always, when in doubt, book a private session with me to get your portfolio on track.

 

Here are Invest Diva's calculations for important USD/CHF approximate levels to keep an eye on:

Support Levels Turning Point Resistance Levels
0.9750 0.9850 0.9950
0.9550 0.9750 1.0055

 

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Kiana 喜愛成
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