USD/CHF – Can US Dollar Recover Above 0.9800 Vs Swiss Franc?
Aayush Jindal
Key Highlights
The US Dollar faced a lot of selling pressure during the past few days and declined below 0.9800 vs the Swiss Franc.
The USD/CHF pair made a major top on 11th May 2017 above 1.0080 and started a bear trend.
The pair traded as low as 0.9690, and started correcting higher.
Today, the US Initial Jobless Claims (May 19, 2017) will be released by the US Department of Labor, which is forecasted to increase from 232K to 238K.
USD/CHF Technical Analysis
The US Dollar after a solid uptrend formed a top near 1.0080 vs the Swiss Franc. The USD/CHF pair declined heavily and moved down by more than 300 pips before finding support at 0.9700.At the moment, the pair is forming a base above 0.9700, and building a correction pattern. A move above 0.9715 was positive, but the pair faces many hurdles on the upside.The first resistance is near a bearish trend line at 0.9780 on the 4-hour chart. Second, the 23.6% Fib retracement level of the last decline from the 1.0998 high to 0.9691 low at 0.9787.However, the most important resistance is near 0.9850. It was a support earlier, and now sellers may prevent gains above 0.9850. The stated resistance also coincides with the 38.2% Fib retracement level of the last decline from the 1.0998 high to 0.9691 low at 0.9787.So, the pair may correct a few pips in the near term, but buyers may struggle to break 0.9800. As a result, we may witness a downside break below 0.9710.
US Housing Price Index
Recently in the US, the Housing Price Index for March 2017 was released by the Federal Housing Finance Agency. The market was looking for an increase of 0.5%, compared with the previous month.The result was positive, as there was a rise of 0.6% in the HPI in March 2017. One of the significant findings as per the report was “Home prices rose in 48 states and the District of Columbia between the first quarter of 2016 and the first quarter of 2017. The top five areas in annual appreciation were: 1) District of Columbia 13.9 percent; 2) Colorado 10.7 percent; 3) Idaho 10.3 percent; 4) Washington 10.2 percent; and 5) New Hampshire 9.5 percent”.The US Dollar failed to gain after the release, and USDCHF traded close to the triangle support area at 0.9720.
Economic Releases to Watch Today
Spain’s Gross Domestic Product for Q1 2017 (QoQ) – Forecast 0.8%, versus 0.7% previous.
Spain’s Gross Domestic Product for Q1 2017 (YoY) – Forecast 3%, versus 3% previous.
UK’s Gross Domestic Product for Q1 2017 (QoQ, Prelim) – Forecast 0.3%, versus 0.3% previous.
UK’s Gross Domestic Product for Q1 2017 (YoY, Prelim) – Forecast 2.1%, versus 2.1% previous.
US Initial Jobless Claims - Forecast 238K, versus 232K previous.
US Goods Trade Balance April 2017 - Forecast $-64.6B, versus $-64.81B previous.
At the moment, the pair is forming a base above 0.9700, and building a correction pattern. A move above 0.9715 was positive, but the pair faces many hurdles on the upside.The first resistance is near a bearish trend line at 0.9780 on the 4-hour chart. Second, the 23.6% Fib retracement level of the last decline from the 1.0998 high to 0.9691 low at 0.9787.However, the most important resistance is near 0.9850. It was a support earlier, and now sellers may prevent gains above 0.9850. The stated resistance also coincides with the 38.2% Fib retracement level of the last decline from the 1.0998 high to 0.9691 low at 0.9787.So, the pair may correct a few pips in the near term, but buyers may struggle to break 0.9800. As a result, we may witness a downside break below 0.9710.