Tomorrow is the Labor Day, which means that financial markets in USA and Canada will be closed tomorrow. In all probabilities, currency trading will be slow. This holiday might have been the reason that Friday was quiet, too, outside of the NFP release. Most of the time, the Dollar pairs do not do much on Labor Day, taking a break with the rest of the country. Here is a snapshot from last year, what happened in USD-CHF, or perhaps, what did not happen.

The entire daily range last Labor Day Monday was about 50 pips, with most of the “action” concentrating around the European open. If there are no big market shaping news, chances are we will see similar inactivity tomorrow. Things could be different for the crosses, currency pairs without the US Dollar. After all, the voices of Yen discontent are still rumbling in Japan in the midst of political in-fighting. Perhaps the JPY and its pairs will show some signs of life.

Last year the crosses moved to some degree, as this chart of GBP-JPY shows. Could happen again. I am interested in watching the opening, on the look out for gaps, just like every week. If none are found, and things are slow, best bet might be to to shut down at least until the London session, or maybe even for the rest of the day. Regardless, no big expectations today…

Focusing out, away from most immediate price action, the EUR-CHF looks interesting. This pair is trying to turn around,but it is a difficult battle. Last week I had a losing trade here, with too early long entry. Right now the weekly chart indicates a possible end of the down trend, creating two successive bullish reversal candlesticks, a hammer followed by a doji. If this is the case, simply going long here might not be a bad idea. Using this chart, the objective should be about 700 pips, while risking 300 or so, with stop just below the low 1.2850.

This situation can be played a little differently, using a smaller time frame. On the 4H chart, the EUR-CHF has established a strong resistance at 1.3165 level. A breakout above it could provide good buy point, especially if it also happens above the 100 SMA, as it should. On the other hand, one could wait for a pull back to just under 1.3000, and go long there. That can be done simply at a predetermined level, I like 1.2975, or upon emergence of a bullish reversal pattern on this chart. Have a great Labor Day!

Mike K.