Safe Haven Flows Into Swiss Franc Make USDCHF Put Options The Favourite
Feb, 10th 06:56
The Swissy has climbed about 4.87 percent in last seven days as the US Dollar has tumbled against most major currencies, due to dimming US and global economic prospects, falling equity markets around the world, and growing fears of economic slowdown even in emerging markets. In this fragile economic environment, risk aversion is shoving investors towards safe heaven assets like gold and the Swiss Franc, as the Swiss Franc traditionally performs well in times of turmoil, because of its general perception as a stable economic and financial centre of the world.
Fig: USDCHF Daily Technical Chart
USDCHF has breached below the December, 2015 low at 0.9797 level on Tuesday . It has crossed down below the 200 day moving average by a big red bar on the daily chart and the stochastic has also turned lower. It is expected that the broken support in the 0.9797-9850 zone will now turn into a resistance zone . The next significant support is at the 0.9475 level , the low of October,2015. A sustained move below 0.9797 would lead it towards the 0.9475.
Buy USDCHF Digital Put Options at 0.9750, if the market retraces back to near the 0.9790 level, and gets rejected at the level. Buy USDCHF Digital Call Options at 0.9620.