Prior to September the USD/CHF was in a prolonged period of consolidated and a recent test of resistance could lead to a return to that environment. Despite the break from the prior range the pair has seen very little volatility on an intra-day basis which makes it attractive to traders looking to use scalping techniques.
Key Technical Levels
The 20-Day SMA had a gravitational pull on the USD/CHF from June through September and today’s test of the level could give birth to a similar frame of trading. Since July we have seen tow extended periods where the pair settled into a 20 pip range when it traded near the technical level. Today’s consolidation following its test may present an opportunity for high frequency traders.
Quantitative Metrics
The USD/CHF’s ATR of 98 bps is the lowest of the pairs listed below and second in terms of percentage of spot at 0.94% making the pair very attractive for traders looking to grab small profits without risk of larger price swings. However, a wide Bollinger band speaks to recent volatility the pair has experienced which saw it decline over 300 pips. This leaves open the door for a potential retrace and traders should take into consideration the possible uptrend. Regardless, a implied volatility of 11.275 reinforces the pair’s stability and increases its attractiveness for scalping strategies.
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To discuss this report or be added to the email list, contact John Rivera, Currency Analyst: jrivera@fxcm.com
