Trading the USDCHF on July 25, 2013 34 ITM

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Your guide to trading the USD/CHF pair

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Why is the USD/CHF an important market?

The currency pairing of the US dollar to Swiss franc (USD/CHF rate) is one of the most commonly traded pairs in the foreign exchange market, representing a significant quota of daily trading. It’s a pairing which is favoured amongst veteran traders and newcomers alike.

Browse Capital.com to discover the largest selection of forex pairs.

USD/CHF trading hours

The forex market is available 24 hours a day, but UK trading, in particular, tends to get active from 8:00 AM and taper off from 5:00 PM (GMT). Of course, there will be times during the day when this currency pair experiences higher volumes – typically around major market announcements.

History of USD/CHF

The US dollar needs no introduction and is paired to all the main currencies. It dates back to 1792 when the United States Congress created the US dollar as the country’s currency. It serves as legal tender in a number countries and is it still regarded as the world’s unofficial reserve currency.

The history of the Swiss franc goes back to the 1700s. During that period, Switzerland had a large variety of different coins in circulation, including a high number of foreign currencies. In an effort to consolidate to a single currency, the Swiss franc was introduced as the principal monetary unit across the country.

Throughout its history, the Swiss franc has often been regarded as something of a safe-haven currency. Historically, there was virtually zero inflation in the franc and, because of legal requirements, a minimum of 40% was backed by gold reserves.

Historical exchange rates USD/CHF:

Factors influencing the USD/CHF

Role of USD

As the most traded currency in the world, the US dollar is affected by a variety of factors. One of the most influential of these are the reports issued by the US Federal Reserve Bank (Fed). This data can help traders understand how the market may change in the future.
The Bureau of Labor Statistics releases Non-Farm Payroll numbers for the US, usually on the first Friday of each month. This data can produce volatility in the value of the USD, and of course, affect the USD/CHF currency pairing.

As with all currencies, economic and political events and occasional crises can play a part in affecting the fluctuations in the exchange rate. News and data about the US economy and politics are constantly available and should be followed to keep up to date with factors which can influence the markets.

Role of CHF

Despite its relatively small economy, Switzerland has very strict banking policies in place which can influence the movement of the price of the franc. This is partly due to the widespread perception of the country’s political neutrality, and for it being a leading force for financial privacy and security.

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GDP data is regularly released which details the factors which can influence the CHF. Figures on the trade balance, inflation rates, retail sales, industrial production, employment figures can be scoured for information which could help indicate how the Swiss franc price could move.

How to trade USD/CHF CFDs

An individual can exchange USD?CHF or trade USD/CHF with either a forex contract or alternatively, they can trade a contract for difference (CFD) on a particular currency pair, and speculate on the price difference.

A CFD is a financial instrument typically between a broker and an investor, where one party agrees to pay the other the difference in the value of a security, between the start and end of the trade. You can either hold a long position (speculating that the price will go up) or a short position (speculating that the price will fall). This is considered a short-term investment or trade as CFDs tend to be used within a limited timeframe.

For instance, to trade the USD/CHF currency pair using CFDs, you speculate on the direction of the underlying asset. If you think the US dollar will appreciate then take a long position by buying the CFDs. If you think the US dollar will lose value against the Swiss franc then you would take a short position by selling CFDs.

Simple profitable strategy with 3 indicators: +25% Profit last week on USD/CHF – page 6

That is not a video of a trade, but a video of some trade being talked of after the fact. I would like to see a video showing a trade from opening to closing

trades after the fact are easier and more profitable in theory. why pressure yourself?

Oh yeah – we could also live after the fact

now THAT! would be interesting. now you are talking!

That s trade i took, i dont record video live because H1 trade will be too long, some people who trade that method have a trading room live. Check my blog please. The most important is to learn the strategy, the role of the indicators and then to spot the setup.

The question to ask yourself is “is it a setup yes or not?”;

There is nothing magic in trading; you have to learn and even live chatroom or signals won’t help you

Trade of the Week: USD/CHF H1: 10-12 March +8.5% Profit (+337 pips)

This is a great campaign on USD/CHF, on the 18th (FOMC report day) at Francfort open, I have a tight fractal box and the ewave is about to cross the zero line, this is a H1 setup. I check on H4, the ewave is also on the way to cross the zero line (and H1 pending order is below the H4 red line, price has some space to move to reach the H4 limit as well), therefore this is a double H1/H4 cross of the zero line! I take the H1 break, the price drops slowly forming a new sell fractal, I take a second entry below that fractal (this is also a double break H1/H4) with a stop loss above the red line at 45 pips as we are in an investing mode, the price drops. Before the FOMC report (like NOFP news), my strategy is to sell half of my position to reduce the risk, then the news came and go in my way, cool. I exit above that huge BDC for a total profit of +8.5% (+5.5% and +3%) and +337 pips (+187 and +150).

Trading USD/CHF

The USD/CHF currency pair, also known as ‘Swissy’, is popular in the forex space despite coming with certain challenges. This page will break down the history of the USD/CHF relationship, including its benefits and drawbacks. It will then look at how to start trading the USD/CHF in 2020, from capitalising on volume and volatility with charts and strategy to signals and trading hours.

USD/CHF Trading Brokers

Chart

Breaking Down ‘USD/CHF’

Firstly, what does USD/CHF specifically mean? The exchange rate you see is simply how many Swiss francs (quote currency) it will cost to buy one US dollar (base currency).

The USD/CHF is one of the most popular traded currency pairs on the forex market. The CH stands for ‘Confoederatio Helvetica’. This is Latin for Switzerland. Whilst the F stands for franc.

But what makes this pairing so interesting? Two straightforward factors:

  1. The US dollar is the world’s largest and most actively traded currency. In fact, it represents approximately half the trading volume of all major currencies.
  2. The Swiss franc is popular because Switzerland holds an impressive one-third of the world’s privately owned wealth in its banks.

It’s also worth bearing in mind that Switzerland is not the only country to use the Swiss franc. Liechtenstein, located between Switzerland and Austria and consisting of just 35,000 inhabitants, also use the Swiss franc.

Why Day Trade USD/CHF?

With so many currency pairings available, why does the USD/CHF currency pair deserve your attention?

  • Liquidity – Despite being relatively less volatile than other pairs and less liquid than the euro and pound, this pair is still relatively straightforward to trade. Whilst there is an array of influences to consider, rates mainly depend on political and economic instability. This is particularly true when international turmoil strikes, as investors rush to the supposed safety of the Swiss franc.
  • Pound similarities – If you have traded or do trade the pound, then the USD/CHF makes for a smooth transition. The British pound and Swiss franc share similar attributes in terms of volatility, price shits, and technical characteristics. So, looking to the development of the pound may help you predict fluctuations in the USD/CHF.
  • Diverse trading vehicles – Due to volume and volatility, you have a number of different USD/CHF trading vehicles at your disposal. From ETFs to futures, options, including E-micro USD/CHF futures.
  • Stable price information – Due to the regular and consistent flow of economic data from the US, Switzerland, and Europe, conducting fundamental analysis is comparatively easy.
  • Availability of resources – In some ways, making money from online chart investing is more straightforward today. You have access to plenty of bar charts, graphs, and commentary websites. Not to mention forums full of advice from experienced traders. You even have weekly charts, forecasts, outlook, and the tools needed for Elliott wave analysis.

Drawbacks/Risks

Although the USD/CHF pair comes with a number of benefits, there are also certain drawbacks and risks you should be aware of. The most significant of which are as follows:

  • Safe haven dilemma – There is some ambiguity to factor in when day trading the USD/CHF now. In times of crisis, both are considered reserve currencies. The problem is, it can be challenging to spot which one people will turn to.
  • Dangers of leverage – Leverage and margin trading allow you to borrow capital to increase your position size. Whilst this may boost potential profits, it can also substantially increase losses.
  • Volatility – Compared to some currency pairs, including many of the majors, the USD/CHF simply does not promise the same levels of volatility. The result of this is less significant spikes and drops, and therefore, less opportunity to generate profits.
  • Automated competition – Profiting from the USD/CHF today means battling with an increasing number of sophisticated algorithms. Even with monthly charts to hand, live streaming data is being analysed and acted upon almost instantaneously by any number of trading bots.

Influences on Movement

Trading the USD/CHD currency pair relies on a detailed understanding of what influences changes in prices and rates. Unfortunately, candlestick charts cannot give you the context that can often prove invaluable.

So, what effects movement in the USD/CHF exchange rate?

  • Monetary policy – The actions of both the Federal Reserve (Fed) and the Swiss National Bank (SNB) will impact price action. The SNB, for example, is known to take an active role in maintaining exchange rates and taking steps to reduce recession and currency deflation. So, keep an eye out for the quarterly SNB announcements on interest rates and policy.
  • Swiss economic data – Economic strength and weakness cause price movements. So, there are some specific announcements that can cause USD/CHF spikes. These include the Swiss Purchasing Managers’ Index (PMI), the Swiss Consumer Price Index (CPI), plus the KOF Economic Barometer. This final resource provides twenty-five economic indicators that make predictions on how the market will perform over the next two quarters.
  • US economic data – The strength of the US economy will influence the currency pair. So, there are certain reports to keep a track of. Employment data, jobless claims, retail sales growth, plus PMI data, can all cause shifts in USD/CHF rates.
  • Wars & natural disasters – Events that affect trading partners of either country or that directly impact the two respective countries, can all be felt in the USD/CHF currency pair. This highlights the need to keep abreast of live news updates.

USD/CHF Currency Correlations

Currency pairs do not move independently of each other. Many are tied to the movement of other pairs. This is known as correlation. Correlation is a statistical measure, ranging from -1 to+1. You can have either:

  • Positive correlation – This is when FX pairs move in line with each other. The GBP/USD, AUD/USD, and EUR/USD currency pairs are all positively correlated. This is because the US dollar is the counter currency. This means any change to the US dollar is felt in all pairs.
  • Negative correlation – This is when currency pairs move in the opposite direction. This is seen in the USD/CHF, USD/JPY, and USD/CAD pairings. This is a result of the US dollar being the base currency.

Often the USD/CHF currency pair is negatively correlated with the EUR/USD. So, traders usually sell the USD/CHF when the EUR/USD price surges. The opposite then happens when the USD/CHF rallies.

There is also a negative correlation between the USD/CHF and the GBP/USD pairs. This is a result of the positive correlation of the Swiss franc, euro and British pound.

Switched on day traders will use this information to their advantage. Looking to other currency pairs may allow you to make more accurate short-term projections as to the movements of the USD/CHF.

USD/CHF Day Trading Strategy

Timing

One of the things that appeals about forex trading and investing is that markets are open 24/7, and you actually get a lot more profitable trading time with the USD/CHF pair than many others. You can trade the pair from Sunday evening until Friday afternoon in the US. However, both volume and volatility will vary throughout the day.

You will find both highs and lows during each 24-hour cycle, but bid-ask spreads will widen during quieter periods, then narrow during active periods. So, when is the best time to trade the USD/CHF pair?

The biggest daily moves often take place when Eurozone and Swiss economic data is released, plus at opening hours for equity, options and futures exchanges. A lot of the data mentioned on this page is usually released between 02:00 and 05:00 ET. The half an hour to one hour before these releases and the three hours afterwards will see the most activity.

Also, some US economic releases can come between 08:30 to 10:00 ET. Again, the periods preceding and following these releases can trigger price action. So, many strategies may benefit from focussing their attention on these time periods.

Also note – forex action often drops significantly around the US lunch hour.

Example

If you’re looking for a simple, straightforward USD/CHF day trading strategy, then consider the example below.

Whilst some traders prefer a 5-minute or 15-minute real-time chart, for this basic strategy, a 1-hour chart is recommended.

You then simply need to mark the high and low of each candle of the trading day. Then your pending order buy should be entered 10 pips above the high. Whilst your pending order sell should be entered 10 pips below the low.

You will also need to minimise your risk and protect against substantial losses. So, place a stop-loss 30 pips from your buy/sell order.

The example here is basic. If you are looking for more detailed strategies, take a look out our strategy page.

Some people prefer day trading the USD/CHF currency pair using historical price charts and complex data. Whereas some focus on trading breaking news. News updates can quickly influence market sentiment.

However, to profit from these announcements you need to be tuned in and ready to react at a moment’s notice. Plus, you need access to reliable and thorough sources.

Below you will find some of the most popular and relevant news resources:

  • Forex factory
  • Yahoo Finance
  • Google Finance
  • Bloomberg
  • Reuters
  • CNBC

On top of breaking news announcements, these sources can also provide a number of other useful services. To name just a few:

  • Forecasts for this coming week
  • Exchange forecasts and daily analysis
  • USD/CHF specific trading definitions
  • Price history reviews and yearly averages
  • Alternative trend views and perspectives
  • Long-term data, from 20 years to 30 years worth of charts
  • Technical outlook and latest analysis from experienced traders

So, if day trading on the USD/CHF using the news is part of your plan, all of the above are resources worth exploring.

History

Early History

Since the launch of the Swiss franc in 1850, the franc has enjoyed enormous strength as a currency. Today the USD/CHF pair now boasts the sixth-largest volume in the global forex space. Originally though, the history of the pair represented steady investment connections between the US and Switzerland.

Direct investments from the US to Switzerland have hit a massive $129.8 billion. As such, over the years the US has become Switzerland’s top destination for foreign direct investment (FDI).

Both currencies have also benefited from strong trade ties. Switzerland is the US’s second-largest trade partner after Germany, representing 10% share of Switzerland’s foreign trade. Switzerland is the US’s 17th largest trading partner, worth just 1.4% of total US trade.

These trade and investment connections shaped much of the USD/CHF relationship for many years. Today, however, current prices and forex live charts respond to more current events.

Recent History

To some extent, the great depression shaped the Swiss franc we know today. It appreciated against all other major trading partners, except from the Japanese yen. It grew so strong the SNB actually stepped in to intervene in the currency market.

The SNB aimed to half the appreciation of the franc against the euro. However, the intervention had clearly failed by 2020. So spectacular was the failure that the franc surged, rallying over 25% in just a few minutes.

It is clear then that the SNB play a vital role in the FX market. This is particularly the case for those trading binary options based on the USD/CHF pair.

Many people do not realise the extent that movement in your live, forex interactive chart is influenced by past events. Events that if you know happened before, allow you to analyse and predict the effects on FX rates this time around.

Role of US Dollar

Whether your day trading strategy relies on support and resistance levels, daily pivot points, or breaking news, having a feel for the staggering role the US dollar plays will help you anticipate future price movement.

Below are some of the key roles the US dollar plays:

  • Many banks all over the world hold currency reserves in the US dollar.
  • Some countries even adopt the US dollar instead of their own or peg their own currency to its value.
  • Oil transactions by OPEC countries are often carried out in US dollar.
  • The US dollar is the most popular traded currency in the world.
  • It is commonly used to settle international transactions.
  • The US is the second largest trading nation in the world, following China.
  • The US accounts for a staggering 25% of the global nominal GDP.

Just a brief look at a long-term USD/CHF chart will show you how prices and average daily ranges shift when announcements are made about the US dollar.

To understand whether the US dollar will strengthen or weaken against the Swiss franc then, you will need to consider a number of important economic indicators.

The most important of which, are as follows:

  • Consumer Price Index (CPI)
  • Producer Price Index (PPI)
  • Non-farm payrolls
  • ISM Non-manufacturing
  • ISM Manufacturing
  • Trade Balance
  • Federal Reserve Minutes
  • Retail Sales
  • Industrial Production

So, USD/CHF technical analysis and forecasts for today should take note of important data releases in the economic calendar.

Also, bear in mind the Federal Open market Committee meetings are every six weeks and economic projections will be published along with press conferences every two to three weeks. All will result in the US dollar moving sharply against other currencies, including the Swiss franc.

Role of Swiss Franc

Getting to grips with USD/CHF day trading means understanding what drives the Swiss economy and franc. Switzerland has famously remained neutral in all major wars in Europe. It is also surrounded by the Alps and considered a stable, isolated nation. This has resulted in the Swiss franc becoming a safe haven currency when turmoil strikes.

This reputation is bolstered by their role in private banking. Despite rules loosening somewhat in the last ten years, Switzerland remains a huge global player in the private banking, insurance, and investment management sectors. They are home to global titans UBS and Credit Suisse.

However, focussing on economic activity in the Eurozone, which influences US movements, is perhaps more useful. 80% of Switzerland’s trade activity happens with the EU.

This means the SNB is often more concerned with its currency vs the euro than the US dollar. It usually only steps in if the franc is too weak or strong vs the euro. Why? Because this will benefit Swiss export businesses, that are mainly involved in trading with neighbouring countries.

To a certain extent then, the role of the Swiss franc and the size of the economy is determined by the successes of their major exporting industries. You will know of two of their big exporting industries, watches and chocolate.

Overall, your daily forex analysis will be influenced by the huge role the Swiss franc plays as a stable, safe haven currency. Not to mention the support of the formidable banking system it has behind it.

Final Word

Day trading on the USD/CHF currency pair promises volatility, volume, and liquidity. However, generating profits can prove challenging as the Swiss franc is seen as a safe haven currency.

You will need to use in-depth technical analysis, calling on charts, patterns, latest foreign exchange news, plus a range of economic resources and indicators. It is also important you find the right broker for your needs, who will facilitate fast and cost-effective trading.

If you can do all of the above, then you’re one step closer to joining the likes of hugely successful forex traders, such as George Soros and Richard Dennis.

Chf usd exchange rate 2020

History of the USD/CHF PAIR

Trading within the Swiss franc is definitely influenced by the world demand for Switzerland’s services as a confidential offshore holding area for funds. The monetary unit additionally trades as a more stable alternative to the Dollar, Euro or British pound in times of turbulence and uncertainty. Whereas there are extremely not enough francs in circulation to use it as an alternative to those currencies, traders and speculators withal appear to prefer the monetary unit once conditions get unsafe in different economies.

The United States dollar is considered a worldwide currency and was the world’s strongest currency for several years. It was formally declared as the USA’s main currency unit within the eighteenth century and is the solely official currency within the US today. Until the introduction of the monetary unit in 1999, the USA dollar was the world’s most significant currency unit. However, the monetary unit currently acts as a strong counterweight to the dollar. The monetary unit has systematically been price more than the dollar in recent years. The USA dollar is additionally facing a new competition from Japan, as a results of the strengthening of the Japanese yen.

Trading the USA dollar and franc pair is named trading the “Swissie”. The CH stands for “Confoederatio Helvetica,” that is Latin for Suisse, and the F stands for monetary unit. TheSwiss franc is a popular currency as a result of Suisse holds roughly tierce of the world’s privately owned wealth in its banks. Suisse is additionally politically neutral and has strict privacy laws governing banking.

SOME VITAL SWISS ECONOMIC DATA TO FOLLOW THAT INFLUENCES THE USD/CHF RATE:

1. Swiss consumer price Index: this number gives a good indication of the general direction of inflation and reflects the health of the economy.

2. SVME: the Swiss purchasing Managers’ Index (PMI) may be a good measure of the Swiss economy and may indicate however the currency values can move.

3. Foreign Currency Reserves: Since the SNB is heavy-handed in manipulating the charge per unit, it’s vital to look at the currency reserves that can be used for this purpose.

4. KOF Economic Barometer: twenty five economic indicators that predict how the market can perform in the next two quarters.

HISTORICAL RATES FOR THE CHF/USD CURRENCY CONVERSION OF 2020

Open: one USD = zero.8877 CHF

Close: one USD = zero.892 CHF

Average: one USD = zero.8899 CHF

Lowest: one USD = zero.8877 CHF

Highest: one USD = zero.892 CHF

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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