The USDCHF pared Friday’s advance but the recent decline may be short lived as technical indicators points to additional gains. Though the fundamental developments have yet to paint a clear picture, the economic docket this week may provide that catalyst needed for the dollar. Events worth noting are the Fed’s Beige Book in addition to producer and consumer prices for the month of December. Expectations of producer and consumer prices as of late are for 3.8 and 1.3 percent respectively. Indeed, I am long from 0.9514, with a stop at 0.9565 in order to lock in some profits. As my overall bias is to the upside, I will keep my position open and target the 0.9751. Upside risks may remain capped by 100-day SMA, which has provided as a key area of resistance since June 2010.
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Taking a look at new trades, I entered into a long GBPCHF position at1.5015 as the pair managed to break above its descending channel that remained intact since November 18th. I am currently out of the money as U.K. house prices fell the most in three months, but as traders shift their focus to the Bank of England interest rate decision and asset purchase target , I would not rule out a reverse in course in the pair.
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Meanwhile, I will look to enter into a short AUDUSD position if the pair manages to make a substantial close below 0.9890. This level is of particular interest in that it coincides with the ascending channel from June. Waiting for confirmation before entering into this short position will be necessary in that the pair has provided traders with a few head fakes in the past. Good luck trading!!!
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