US-EU Trade Agreement Disadvantages Swiss Franc: Learn Trading Strategies
The current outlook for December Swiss franc futures (S6Z25) is bearish, according to technical analysis and market conditions. This bearish trend is driven by the strengthening U.S. dollar, which is appreciating on the foreign exchange market due to positive U.S.-EU trade developments [1].
The moving average convergence divergence (MACD) indicator for December Swiss franc futures is in a bearish posture. The red MACD line is below the blue trigger line, and both lines are trending down [3]. This bearish trend has caused prices to reach a five-week low, with technical resistance identified near 1.2850 [1].
Fundamentally, the strengthening U.S. dollar is putting downward pressure on the Swiss franc, a currency typically sought after as a safe-haven in times of market uncertainty. Better risk appetite in the general marketplace recently is negatively impacting the Swiss franc [2].
Should the Swiss franc futures break the key chart support level at 1.2550, the downside target could extend approximately to 1.1850 or below, giving bears more control [1].
However, it's crucial for traders to manage their risk carefully given market volatility and mixed short-term signals. For instance, the Parabolic SAR suggests a gradual upward trend, but the relative strength index (RSI) and pivot points imply possible short-term bearishness [2].
Before entering into commodity futures and options contracts, individuals should understand their exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents provided by their broker. The Commodity Futures Trading Commission (CFTC) warns that trading commodity futures and options is volatile, complex, and risky [4].
It's essential to remember that any trades discussed in this article are hypothetical in nature. The author, Jim Wyckoff, does not manage any trading accounts other than his own personal account, and the information and data provided are solely for informational purposes [5].
Traders should use their own discretion when deciding when and if to initiate trades and determine the size of any trades they may initiate. It is up to the reader to decide their financial experience, goals, and resources before engaging in futures or options trading.
[1] - Technical Analysis: Swiss Franc Futures Bearish Outlook [2] - Mixed Signals for USD/CHF Spot Rate [3] - MACD Indicator Shows Bearish Trend for Swiss Franc Futures [4] - CFTC Warns about Futures Trading Complexity and Risk [5] - Disclosure Statement for Jim Wyckoff's Trading Articles
In the current market context, investors might want to consider reallocating some funds from Swiss franc investments, given the bearish outlook for December Swiss franc futures. The strengthening U.S. dollar, driven by positive U.S.-EU trade developments, is seemingly having a detrimental effect on Swiss franc investments, and technology could play a role in analyzing potential investment opportunities in alternative currencies or assets.
