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The US dollar has started showing signs of exhaustion against the Swiss franc. The recent economic data also failed to impress the market, like the US pending home sales data. It registered a decline of 1%, whereas there was a gain of more than 3% in the previous month. The USDCHF pair is trading around an important support area, which is holding the downside for now, but if it gives way, then more losses are feasible in the short term. There is an important release lined up during the NY session i.e. the CB consumer confidence will be released. Let us see how the US dollar reacts after the data release.
There is an important bullish trend line on the hourly chart of the USDCHF pair, which is holding the downside as of now. The 23.6% fib retracement level of the last move from the 0.9392 low to 0.9531 is also sitting around the highlighted trend line. If the pair successfully manages to break the trend line and support area, then it could take the pair towards the next possible support area of 100 hourly moving average. However, the 50% fib retracement level might act as a swing support for the pair in that situation. Any further losses might call for a test of the 200 hourly moving average in the near term.
On the other hand, there is also a possibility that the USDCHF pair might bounce from the current levels. So, if the pair manages to survive a break, then a run towards the last high is possible again.
Overall, selling with a break below the trend line can be considered moving ahead.
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Posted By IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com
