Put Options Favorable for USDCHF Amid Overbought Sentiment
Aug, 05th 04:30
The price of USDCHF rose on Wednesday for the third day in a row, to more than 0.9775 after the release of some upbeat economic reports. The technical sentiment is bullish because of a Higher High and High Low in the ongoing wave on daily chart.
As of this writing, the pair is being traded around 0.9779. It is likely to find a support around 0.9677, the 76.4% fib level ahead of 0.9561, the 61.8% fib level and then 0.9467, the 50% fib level. The technical bias will continue to be bullish as long as the 0.9150 support area is intact.
On the upside, A hurdle may be noted around 0.9800, the psychological number ahead of 0.9864, the swing high of the last major upside rally as demonstrated in the following daily chart.
New orders for U.S. factory goods rebounded strongly in June on robust demand for transportation equipment and other goods, a hopeful sign for the struggling manufacturing sector.
The Commerce Department said on Tuesday new orders for manufactured goods increased 1.8 percent after declining 1.1 percent in May.
The Commerce Department also said orders for non-defense capital goods excluding aircraft – seen as a measure of business confidence and spending plans – increased 0.7 percent instead of the 0.9 percent rise reported last month.
Meanwhile manufacturing inventories increased a solid 0.6 percent, which was more than the government assumed in its second-quarter GDP snapshot published last week.
Binary Options Trade Idea
Considering the overall technical and fundamental outlook, buying the put options for USDCHF appears to be a good strategy in short to medium term.