Today brought an exceedingly strong open to March for the Greenback versus the forex majors. Strong rallies in the USD/CHF (+0.71%), USD/JPY (+0.24%), and a bearish intraday trend in the EUR/USD (-0.18%) paced the action. The only real weak spot was in the USD/CAD (-0.75%) which unexpectedly fell in tandem with lagging WTI crude oil prices. To open the third trading month of 2021, it appears as though institutional investors are thinking that an intermediate-term bottom may be in for the US dollar.
The story of the late Wall Street session was a strong rally in American stocks. All three primary indices trended higher, led by a 3% gain in the NASDAQ Composite. Underpinnings for today’s bullish “risk-on” attitude are being reported as a downturn in T-bond yields and pending Senatorial approval of Biden’s $1.9 trillion COVID-19 relief package.
One of the forex’s biggest movers was the bullish breakout in the USD/CHF. Let’s dig into the weekly technicals for this pair and see if we can spot a trading opportunity.
A Strong Forex Open To March For The Greenback
For the third consecutive week, the USD has fared well against the Swissy. In fact, the uptrend in the USD/CHF has largely mirrored that of the U.S. equities indices. For now, it’s risk-on with market participants bidding stocks aggressively.
Until the weekend break, there is one level on my radar for the USD/CHF:
- Resistance(1): November 2020’s High, 0.9207
Bottom Line: If the Greenback continues to show strength against the Swiss franc, a shorting opportunity may come into play from just beneath the 0.9200 handle. Until elected, I’ll have sell orders queued up from 0.9194 in the USD/CHF. With an initial stop loss at 0.9229, this trade produces 30 pips on a slightly sub-1:1 risk vs reward ratio.