With a debt limit agreement struck over the weekend, does this mean that the dollar is in for a big rally today?
Here’s a simple range setup I’m watching on USD/CHF.
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. President Biden and House Speaker McCarthy announce a U.S. debt ceiling deal as part of a two-year budget agreement which keeps non-defense spending roughly flat
Chinese industrial profits fell 18.2% year-over-year in April, following earlier 19.2% slump in March as faltering rebound and softer demand weighed
WSJ reports that tensions are rising between Saudi Arabia and Russia for not following through on its pledge to increase production
North Korea announced plans to launch a “satellite” in the next few days, with Japanese PM Kishida warning that any missile launch could be in serious violation of UN law
Price Action News
Overlay of USD Pairs 15-min
The U.S. dollar is starting the week in selloff mode, even after Biden and McCarthy announced a deal to raise the debt ceiling over the weekend.
By the looks of it, risk-taking is in play and favoring higher-yielding currencies like the Aussie and Loonie.Traders seem to be shrugging off geopolitical tensions stemming from within the OPEC+ and between North Korea and Japan, although the safe-haven yen managed to chalk up small gains.
Upcoming Potential Catalysts on the Forex Economic Calendar:
European and U.S. banks closed for the holiday today
New Zealand building consents at 10:45 pm GMT
Japanese unemployment rate at 11:30 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
USD/CHF: 15-min
USD/CHF 15-min Forex Chart by TV
This pair has been bouncing back and forth between support at .9020 that lines up with today’s S1 and resistance at .9080 which coincides with R1.
USD/CHF has just dipped below the pivot point and might be setting its sights on the bottom of the range again. If it holds as a floor, another move back up to the top could follow.A breakdown, on the other hand, could set off a drop that’s the same height as the rectangle pattern or roughly 60 pips.
Either that or price could dip to the next potential support at S2, which is near the .9000 major psychological mark.
Meanwhile a strong rally from the dollar could also trigger a bullish rectangle breakout that could take USD/CHF up to the next ceiling at R2 (.9100).
There’s not much in the way of top-tier catalysts for now, though, since U.S. markets are closed in observance of Memorial Day. Even so, positive sentiment from the recently struck debt ceiling agreement could mean upside for the U.S. currency.