The USDCHF currency pair continues to trade in a range of 0.89-0.9. Friday's attempt to break through the upper boundary failed, as well as yesterday's move to the lower boundary. It seems that quotes found levels of stability after a very volatile first half of June. Nevertheless, strong price movements can also be observed inside the existing flat.
The hawkish position of a significant number of Fed officials keeps the USDCHF from hiking to the May lows. Prospects for at least one more increase in interest rates support the attractiveness of dollar assets. The head of the U.S. regulator Jerome Powell has mentioned the second rate hike several times. At the same time, market participants still do not include it in the prices of financial instruments.
The release of new macroeconomic statistics could change the situation. After the strong data on the U.S. housing construction last week, today the real estate sales statistics will be presented. Also figures on durable goods orders are under attention. The positive nature of the statistics will increase the probability of further monetary policy tightening, which will be beneficial for the dollar.
However, the most important data on the U.S. economy will be published by the end of the week. On Thursday, the final numbers on the U.S. GDP for the 1st quarter will be released, and on Friday, the updated Consumer Spending Price Index (PCE) will be presented. Probably market participants are most interested in the PCE value, as it is the indicator used by the Fed to determine the rate of price growth and the need for monetary policy corrections.
By the end of the week, the USDCHF may find a reason to move out of the current 0.89-0.9 range, but until then, these levels look pretty stable. Therefore, it is possible to use a trading strategy to buy USDCHF at the lower boundary of the flat and sell at the upper boundary, and vice versa. The idea remains relevant until the trading session closes outside this range.
The following trading strategy options can be offered:
1) Buy USDCHF in the range of 0.892-0.893. Take profit – 0.9. Stop loss – 0.89.
2) Sell USDCHF in the range of 0.897-0.898. Take profit – 0.89. Stop loss – 0.9.
Also, traders may use Trailing stop instead of a fixed Stop loss at their convenience.
This content is for informational purposes only and is not intended to be investing advice.
