USD/CHF Eyes Upside Break, Dips Supported Near 0.9750

Key Highlights

  • The US Dollar remains well supported above 0.9750 against the Swiss Franc.
  • USD/CHF is facing resistance near 0.9880 and a bearish trend line on the 4-hours chart.
  • The US Consumer Confidence declined to 135.1 in August 2019, whereas the forecast was 129.5.
  • The Swiss ZEW Expectations Index is likely to improve from -24 to -21 in August 2019.

USD/CHF Technical Analysis

This past Friday, the US Dollar declined sharply from 0.9880 against the Swiss Franc. However, the USD/CHF pair remained supported above 0.9700 and recently started a solid upward move.

USD/CHF Technical Analysis US Dollar Swiss Franc

Looking at the 4-hours chart, the pair traded as low as 0.9713 and climbed back above the 0.9750 resistance level. Moreover, there was a break above the 50% Fib retracement level of the downward move from the 0.9877 high to 0.9713 low.

The upward move was positive, with a break above 0.9800 and the 100 simple moving average (red, 4-hours). On the upside, there are a few key resistances near the 0.9840 and 0.9880.

Additionally, there is a bearish trend line forming with resistance near 0.9850 on the same chart. Therefore, the pair might face hurdles, starting with 0.9840 and up to 0.9880. If there is an upside break above 0.9880, the pair could accelerate towards the 0.9940 and 0.9950 levels.

Conversely, if the pair fails to climb above 0.9850 or 0.9880, it could correct lower. An immediate support is near the 0.9760 and the 100 SMA. However, the main supports on the downside are near the 0.9725 level and a connecting bullish trend line.

Fundamentally, the US Consumer Confidence index for August 2019 was released by the Conference Board. The market was looking for a drop from 135.7 to 129.5.

The actual result better than the forecast, as the US Consumer Confidence came in at 135.1. Moreover, the last reading was revised up from 135.7 to 135.8.

The report added:

The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – increased from 170.9 to 177.2. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – declined from 112.4 last month to 107.0 this month.

Overall, USD/CHF is likely to continue higher, but EUR/USD remains at a risk of more downsides. Conversely, GBP/USD managed to recover above 1.2200 and 1.2250 in the past few sessions.

Upcoming Economic Releases

  • Germany’s GfK Consumer Confidence for Sep 2019 – Forecast 9.6, versus 9.7 previous.
  • Swiss ZEW Expectations Index for August 2019 – Forecast -21.0, versus -24.0 previous.

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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