News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bullish
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/nB2f5m56nq
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/Q0yRRpMpPX
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here: https://t.co/eILWbFgHRE https://t.co/pSeSiNnmHe
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDe1Ksp https://t.co/iVOEuK40rn
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCYRCIk https://t.co/ltEO5dpKux
  • WTI crude oil is currently trading up against major resistance via the 2019 and 2020 highs within the confines of a channel; something has to give. Get your market update from @PaulRobinsonFX here: https://t.co/MO9foRjm2y https://t.co/YhBFdvZDEb
  • The Dow Jones and S&P 500 outlook appears bleak in the near term as retail traders increase their upside exposure. At the same time, these indices confirmed bearish technical warning signs. Get your market update from @ddubrovskyFX here:https://t.co/fKCHELbOxo https://t.co/eVDwmFTaIg
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/8B8hqHahm1
  • The US Dollar finished off an eventful week after CPI and retail sales injected volatility into markets. FOMC is now in the Greenback’s sights as taper talks linger. Get your market update from @FxWestwater here: https://t.co/MHi0lfQ93j https://t.co/4XetwYAaNd
  • Get your snapshot update of the of market open and closing times for each major trading hub around the globe here: https://t.co/BgZLFljIhZ https://t.co/ZZRLV0Wkea
USDCHF May be the Best Dollar Bullish Option for Trade War Status Quo

USDCHF May be the Best Dollar Bullish Option for Trade War Status Quo

John Kicklighter, Chief Strategist

USDCHF Talking Points:

  • My focus for a positive turn for trade wars after the G-20 meeting was USDJPY owing to the Dollar and risk-linked benefits
  • The actual outcome for trade relations following the summit was more 'status quo' which present serious doubt on risk trends
  • For a counterpart to the Greenback that aligns to a scenario of passive strength, USDCHF may offer a better overall mix

See how retail traders are positioning in USDCHF and USDJPY along with the other major Dollar-based majors using the DailyFX speculative positioning data on the sentiment page.

This week's top scheduled event risk didn't even take place within the 7-day time frame. Rather, the two-day G-20 summit in Osaka, Japan concluded on Saturday; so the first opportunity to respond to its outcome wasn't until liquidity was restored on Monday. While there were a range of points under discussion, the principal concern in this meeting of leaders was the state of trade - both across the globe and specifically between the United States and China.

As with most known events with heavy potential for fundamental impact, I evaluated the various scenarios to see if there was particular opportunities that could be pursued should the market conform to the logic. For a worsening of trade wars, my focus was gold - outside of the FX space as the implications for traditional fiat stability would be far more severe than any individual opportunity or detriment amongst the majors. Alternatively, my preference for an improvement in relations between the two nations was for a USDJPY rally. The combination of an improved outlook for risk trends would favor buoyancy behind all Yen crosses while the Dollar would stand to benfeit the relief afforded to the currency at the center of all the trade war pressure.

Chart of USDJPY and Opening Gaps (Daily)

USDCHF May be the Best Dollar Bullish Option for Trade War Status Quo

Ultimately, the latter pair responded in line with the assessment after the stakes of the meeting were tallied. Technically-speaking, USDJPY put in for a very provocative move with a gap higher on the open of the week that would clear resisance on a desending trend channel. While this is an impressive response, I am concerned with the potential of follow through. The outcome of the G20 was not in fact a true improvement for the state of trade around the world. Instead, it was an unexpected status quo - whereby the US didn't follow through with escalations but negotiations would continue into the future - which will struggle to tap genuine conviction. That is a particularly difficult trend to sustain against the backdrop of a liquidity drain for the holiday week.

USDCHF May be the Best Dollar Bullish Option for Trade War Status Quo

A potentially better candidate for this particular middling outcome with a strong technical response for the Dollar and some motivation to see a countercurrency contribute to the mix is USDCHF. For the Swiss currency's part, we have recent headlines that Swiss stock markets have effectively lost direct access to EU investors. While a financial cap, this will not likely upset the Swiss National Bank (SNB) which has struggled to keep the local currency capped through policy efforts in an effort to leverage growth. There is also a modest connection to risk trends with the Franc playing a different, but more appropriate haven for recent circumstances, which could benefit from a coast higher in risk that also doesn't tie it down should it falter (both currencies are sought in safety for different reasons).

Chart of USDCHF and 1-Day Rate of Change (Daily)

USDCHF May be the Best Dollar Bullish Option for Trade War Status Quo

Ultimately, this is a Dollar-based major that aligns more naturally the technicals and fundamentals than the likes of the EURUSD, USDJPY or NZDUSD. However, USDCHF doesn't override the practical limitations of liquidity - a factor of what I consider 'market conditions'. If the liquidity drain between structural complacency, Summer doldrums and the week of the Independence Holiday in the US tames all markets, this pair would similarly lose traction.

If you want to download my Manic-Crisis calendar, you can find the updated file here.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES