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Aayush Jindal

Key Highlights

  • USD/CHF found support near 0.9500 and recovered above 0.9620.
  • A major bearish trend line is forming with resistance near 0.9695 on the 4-hours chart.
  • The Swiss Retail Sales increased 0.3% in Feb 2020 (YoY).
  • The US ISM Manufacturing Index is likely to decline from 50.1 to 45.0 in March 2020.

USD/CHF Technical Analysis

This past week, the US Dollar declined below the 0.9700 support area against the Swiss Franc. USD/CHF even broke the 0.9600 support area to move into a short-term bearish zone.

Looking at the 4-hours chart, the pair even spiked below 0.9540 and the 100 simple moving average (red, 4-hours). It traded as low as 0.9501 and it is currently correcting losses.

There was a break above the 0.9580 and 0.9600 resistance levels. Besides, the pair gained momentum above the 23.6% Fib retracement level of the downward move from the 0.9900 high to 0.9501 low.

On the upside, there is a major resistance zone forming near the 0.9700 area. There is also a major bearish trend line forming with resistance near 0.9695 on the same chart.

The 50% Fib retracement level of the downward move from the 0.9900 high to 0.9501 low is also near 0.9700. Therefore, a successful break and close above 0.9700 is needed for a sustained upward move.

If USD/CHF fails to recover above the 0.9700 resistance, it is likely to resume its decline. An initial support is near the 0.9590 level and the 100 SMA. A clear break below the 0.9590 level could set the pace for a retest of 0.9500.

Fundamentally, the Swiss Retail Sales report for Feb 2020 was released by the Swiss Federal Statistical Office. The market was looking for a 0.7% decline in sales in Feb 2020, compared with the same month a year ago.

The actual result was better than the forecast, as the Swiss Retail Sales grew 0.3% in Feb 2020 (YoY). Besides, the last reading was revised up from -0.1% to 0%.

Overall, USD/CHF is likely to face hurdles near 0.9700. Looking at EUR/USD, the pair is correcting gains from the 1.1150 resistance, while GBP/USD remained well bid above 1.2300.

Upcoming Economic Releases

  • Germany’s Manufacturing PMI for March 2020 - Forecast 45.5, versus 45.7 previous.
  • Euro Zone Manufacturing PMI March 2020 – Forecast 44.7, versus 44.8 previous.
  • UK Manufacturing PMI for March 2020 – Forecast 47.0, versus 48.0 previous.
  • US Manufacturing PMI for March 2020 – Forecast 49.2, versus 49.2 previous.
  • US ISM Manufacturing Index for Feb 2020 – Forecast 45.0, versus 50.1 previous.