Can USD/CHF Capitalize and Trade above 0.9450?

Key Highlights

  • After a major decline, the US Dollar found support near 0.9250 against the Swiss Franc.
  • There was a break above two bearish trend lines with resistance at 0.9290 and 0.9380 on the 4-hours chart of USD/CHF.
  • The pair needs to move above the 0.9450 resistance to gain upside momentum.
  • The Swiss Consumer Price Index in Jan 2018 increased 0.7%, less than the forecast of 0.8% (YoY).

USDCHF Technical Analysis

There was a substantial decline in the US Dollar from the 0.9660 swing high against the Swiss Franc. The USD/CHF pair found support near 0.9250 and it later started an upside correction.

USDCHF Technical Analysis US Dollar Swiss Franc

Looking at the 4-hours chart, it seems like the pair was well bid around the 0.9250 level. It traded above the 23.6% Fib retracement level of the last decline from the 0.9666 high to 0.9252 low.

During the upside move, the pair broke two bearish trend lines with resistance at 0.9290 and 0.9380. It cleared the path for more gains and the pair moved above 0.9400.

However, the upside move faced a strong resistance near 0.9450. The stated 0.9450 level is near the 50% Fib retracement level of the last decline from the 0.9666 high to 0.9252 low. Moreover, the 100 simple moving average (red, 4-hours) also prevented upsides above 0.9450.

The pair is currently consolidating above the 0.9320 level. It has to move above the 0.9450 resistance and settle above the 100 simple moving average (red, 4-hours) to rise further.

On the flip side, if the pair fails to move higher, the 0.9320 support could act as a decent buy zone. Below 0.9320, the pair may retest the last swing low of 0.9252.

Swiss CPI

Recently in Switzerland, the Consumer Price Index for Jan 2018 was issued by the Swiss Federal Statistical Office. The market was looking for an increase of 0.8% in the CPI in Jan 2018 compared with the same month a year ago.

The actual result was lower as the CPI increased 0.7%. The monthly change was -0.1%, which was similar to the forecast. The report added:

The decrease of 0.1% compared with the previous month is due in particular to the decrease in prices for outpatient hospital medical services. Prices for air transport also declined, along with prices for clothing and footwear, in particular because of sales. In contrast, prices for overnight stays in hotels, heating oil and electricity increased.

Overall, the market sentiment is neutral at the moment, and pairs such as EUR/USD and USD/JPY may consolidate for some time before the next leg.

Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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