USD/CHF Breaks Key Support Ahead of Fed’s Rate Decision08 November, 2018 by Aayush Jindal in Market Analysis
- The US Dollar started a downside move from the 1.0090 resistance against the Swiss Franc.
- There was a break below two important bullish trend lines at 1.0030 on the 4-hours chart of USD/CHF.
- The Euro Area Retail Sales in Sep 2018 increased 0.8% (YoY), more than the 0.7% forecast.
- Today, the Fed Interest Rate Decision is scheduled, which is forecasted to remain at 2.25%.
USDCHF Technical Analysis
The US Dollar remained in a nice uptrend above 1.0000 until sellers appeared near 1.0090 against the Swiss Franc. The USD/CHF pair topped at 1.0094 and later started a sharp downside correction.
Looking at the 4-hours chart, the pair declined heavily and broke the 1.0060 and 1.0040 support levels. Besides, there was a break below the 50% Fib retracement level of the last major upward move from the 0.9847 low to 1.0094 high.
More importantly, there was a break below two important bullish trend lines at 1.0030. The decline was such that the pair also cleared the 0.9980 support and the 100 simple moving average (4-hours, red).
An immediate support on the downside is near the 0.9935-40 zone, below which the pair could trade towards the 76.4% Fib retracement level of the last major upward move from the 0.9847 low to 1.0094 high.
On the flip side, if there is an upside correction, the pair could find resistance near the 0.9995 level and the 100 SMA. Above the 100 SMA, the pair may perhaps revisit the 1.0040 level, which was a support earlier and now it is likely to act as a resistance.
Looking at other major pairs, EUR/USD recovered nicely and broke the 1.1440 resistance area. Similarly, there were gains noted in GBP/USD above the 1.3100 resistance area. Going forward, today’s Fed Interest Rate Decision may impact the market sentiment in the short term.
Economic Releases to Watch Today
- Germany’s Trade Balance for Sep 2018 – Forecast €18.0B, versus €18.3B previous.
- US Initial Jobless Claims – Forecast 214K, versus 214K previous.
- Fed Interest Rate Decision – Forecast 2.25%, versus 2.25% previous.