Fundamentals: CHF hasn't been acting in traditional safe haven character, with global risk sentiment in the "off" position and CHF is weakening. Unsure why this is, but if you look at yield spread between treasuries and CH10 its been widening all year as treasury yields rally and CH10 yield is relatively unchanged on the year. jan2018 spread= 250bps & Oct spread = 320bps implying higher for this market. Coupled with that I wonder if theres a carry trade developing for this market, with Fed rates at 2.25% with outlook set to hike through 2019 past 3% and the Snb with rates at -0.75% also generating demand for this market.
Technical: However I like the technicals for this trade. 1.0050 is a huge resistance level and the reward for the trade is 7 to 1, taking profits along the way. I think due to the bullish factors for this market, generally stronger USD and weaker CHF id move my stop loss to breakeven quicker than normal.
Theres also the possibility that the resistance level may break to the upside in which case would look for bullish trade.
Technical: However I like the technicals for this trade. 1.0050 is a huge resistance level and the reward for the trade is 7 to 1, taking profits along the way. I think due to the bullish factors for this market, generally stronger USD and weaker CHF id move my stop loss to breakeven quicker than normal.
Theres also the possibility that the resistance level may break to the upside in which case would look for bullish trade.
Comment:
3 profit targets for the trade, T1= 9870, T2= 9800 and T3 9700
Comment:
Market reacted really well to the resistance level, trade is now locked in breakeven as mid terms are coming up next teus. Claims this morning that Trump had ordered his cabinet to write up a China trade deal also sent this market aggressively lower, however since then gov officials denied the claims and USD has turned back higher. NFP data was strong imo and now were seeing some reversal in the risk on sentiment weve enjoyed in the last couple days.
SNB also made comments y'day afternoon about rates not staying low forever which initially market spiked lower but rebounded before dropping again so nothing new there.
SNB also made comments y'day afternoon about rates not staying low forever which initially market spiked lower but rebounded before dropping again so nothing new there.
Trade closed manually:
Closed the trade manually, ahead of mid terms risk and due to the USD strength from Trump source denied couple with NFP...de risking whole portfolio and will look for new set ups post elections... sucks