The USDCHF saw a sharp rise but faced resistance within a key range of 0.8017 to 0.8023. This area has often acted as a barrier, affecting the pair’s movements since late June. Previously, the pair found support at the 100-hour moving average, moving above the 200-hour moving average and a resistance zone of 0.7986 to 0.7994. This zone now acts as support for any possible declines.

Key Price Levels and Targets

If the price reaches above 0.8023, the next targets will be between 0.8054 and 0.8062, with a 38.2% retracement at 0.8102. If the price fails to stay above the 0.7986–0.7994 range and the 200-hour moving average at 0.7980, we might see a pullback towards 0.7947, where support is provided by the swing area and the 100-hour moving average. The USDCHF is currently pausing right where Michalowski pointed out, at the key swing area resistance. This pause presents an opportunity for derivative traders to set up for the next move. Given the current technical situation, we are preparing for a potential breakout or rejection from this level. If the price breaks decisively above 0.8023, we may consider buying call options with strike prices close to the next targets of 0.8054 and 0.8102. Recent inflation data from the US, which was 3.2% for October, remains above the Federal Reserve’s target. This supports a “higher for longer” interest rate outlook, which could strengthen the dollar. The current economic backdrop favors a bullish trend. On the other hand, if the price does not break higher and falls below the 0.7986 support level, we would look to buy put options. The Swiss National Bank has not raised rates as aggressively as the US, and any signs of global risk aversion could increase the franc’s appeal as a safe haven. A drop towards the 0.7947 support would be our first target for these bearish positions.

Market Sentiment and Volatility Strategies

Our bullish outlook is further backed by recent Commitment of Traders data showing that large speculators are increasing their net-long positions in the US dollar. Historically, this institutional sentiment often precedes extended upward trends in dollar pairs. This indicates that breaking the identified resistance may be more likely. We are also carefully watching implied volatility levels, which have remained relatively low. Historical trends suggest that this pair can quickly shift from low to high volatility, especially when central bank announcements are made. Therefore, using strategies like straddles or strangles around the current price could be a smart way to trade potential movements in either direction. Create your live VT Markets account and start trading now.

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