Market News & Analysis


USD/CHF breaking out?

With the Dollar Index breaking to a new 2019 high today and risk assets remaining generally supported, demand for haven assets has fallen further. Gold has broken key support in the $1485 region, triggering a cluster of stops sitting below than handle to create panic selling. Meanwhile, the USD/JPY has remained above the 108 handle, thanks not only to a firmer US dollar, but a weak yen too with the likes of GBP/JPY and CAD/JPY rising. Meanwhile the other key haven currency – the Swiss franc – has weakened too, falling even against the yen. Consequently, the USD/CHF is one where the dollar bulls are eying closely for a breakout.

In fact, the USD/CHF has broken above the 200-day average again. Will it be third time lucky? In the previous two occasions, the breakout only lasted at most for a day, before selling pressure ensued. This time could be different given the widespread dollar strength and judging by the bullish characteristics of price action as well. On that note, the bulls will be pleased to see that Friday’s bearish engulfing candle completely failed to lure new sellers in. With the bears trapped now, any-test of Friday’s high around 0.9950 could see these participants cover their bets, adding to the buying pressure. So, 0.9950 is the most important short-term support level to watch now. But if this level fails to hold and price subsequently goes below Friday’s low at 0.9890 then in that case, the bullish setup would become invalidated again. But for now, the path of least resistance remains to the upside and a rally beyond parity looks imminent.  


Source: eSignal and City Index.

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.