USD/CHF Remains At Risk of Further Declines

Key Highlights

  • The US Dollar failed to break the 1.0000 resistance and declined against the Swiss Franc.
  • There is a major bearish trend line formed with resistance near 0.9980 on the 4-hours chart of USD/CHF.
  • The Swiss Consumer Price Index in Nov 2018 declined 0.3% (MoM), more than the -0.1% forecast.
  • Today, the Euro Zone Services PMI for Nov 2018 will be released, which is forecasted to remain at 53.1.

USDCHF Technical Analysis

After a major drop, the US Dollar found support near the 0.9910 level against the Swiss Franc. The USD/CHF pair recovered above 0.9950, but it struggled to break the 1.0000 barrier.

USDCHF Technical Analysis US Dollar Swiss Franc

Looking at the 4-hours chart, the pair faced a strong resistance near the 1.0000 level, 200 simple moving average (green, 4-hours), and the 100 simple moving average (red, 4-hours). The pair also struggled to clear the 38.2% Fib retracement level of the last major downward move from the 1.0128 high to 0.9909 low.

More importantly, there is a major bearish trend line formed with resistance near 0.9980 on the same chart. The pair retreated and declined below the 0.9980 and 0.9960 support levels.

On the downside, the main support is near the 0.9920 and 0.9910 levels. Should sellers gain control below 0.9900, the pair could slide towards 0.9840. On the other hand, buyers need to clear the 1.0000 resistance plus the 100 SMA to gain bullish momentum in the near term.

Fundamentally, the Swiss Consumer Price Index for Nov 2018 was recently released by the Swiss Federal Statistical Office. The market was looking for a 0.1% decline in the CPI compared with the previous month.

However, the result was disappointing as there was a decline of 0.3% in the CPI. The yearly change was 0.9%, less than the 1.0% market forecast. The overall price action remained bearish for USD/CHF and it seems like buyers may continue to struggle near the 1.0000 resistance.

Economic Releases to Watch Today

  • Germany’s Services PMI for Nov 2018 – Forecast 53.3, versus 53.3 previous.
  • France Services PMI Nov 2018 – Forecast 55.0, versus 55.0 previous.
  • Spanish Services PMI for Nov 2018 – Forecast 53.7, versus 54.0 previous.
  • Euro Zone Services PMI for Nov 2018 – Forecast 53.1, versus 53.1 previous.
  • UK Services PMI for Nov 2018 – Forecast 52.5, versus 52.2 previous.
  • BoC Interest Rate Decision – Forecast 1.75%, versus 1.75% 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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