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Aayush Jindal

Key Highlights

  • USD/CHF found support near 0.8870 and started a fresh increase.
  • There was a break above a contracting triangle with resistance near 0.8935 on the 4-hours chart.
  • EUR/USD declined below 1.2100, gold price broke the $1,800 support.
  • The US Retail Sales increased 5.3% in Jan 2021 (MoM), up from the last -1%.

USD/CHF Technical Analysis

After a strong decline, the US Dollar found support near 0.8870 against the Swiss Franc. USD/CHF surpassed the 0.8920 resistance, but it could face hurdles near 0.9000.

Looking at the 4-hours chart, the pair traded as low as 0.8871 and climbed back above 0.8940. There was also a break above a contracting triangle with resistance near 0.8935.

The pair even cleared the 50% Fib retracement level of the downward move from the 0.9045 high to 0.8871 low. The next major resistance is near the 0.8990 level (the last breakdown zone).

Any more gains could lead the pair towards the 0.9000 hurdle. A close above 0.9000 could start a strong increase. If not, there is a risk of a fresh decline towards the 0.8920 and 0.8900 support levels. The 200 simple moving average (green, 4-hours) is also near the 0.8900 level to provide support.

Fundamentally, the US Retail Sales figure was released by the US Census Bureau. The market was looking for a 1% increase in sales compared with the previous month.

The actual result was better than the forecast, as the US Retail Sales grew 5.3%. Besides, the last reading was revised down from -0.7% to -1%.

The report added:

Total sales for the November 2020 through January 2021 period were up 4.6 percent (±0.5 percent) from the same period a year ago.

Overall, USD/CHF might climb further, but it could struggle to clear the 0.9000 resistance. Conversely, EUR/USD declined below the 1.2100 support after it failed to surpass 1.2150.

Economic Releases

  • US Housing Starts Jan 2021 (MoM) – Forecast 1.658M, versus 1.669M previous.
  • US Building Permits Jan 2021 (MoM) – Forecast 1.678M, versus 1.704M previous.
  • US Initial Jobless Claims - Forecast 765K, versus 793K previous.