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The US dollar corrected a bit lower against the Euro and the British pound, but at the same time it traded higher against the Swiss franc. In short, the Swiss franc weakened which pushed the USDCHF and EURCHF higher. The USDCHF pair traded higher and broke an important resistance area, which opened to doors for more upsides in the near term. There are several important releases lined up today in the US, including the services PMI and new home sales data. It would be interesting to see how the pair trades in the coming sessions. There is a possibility of a correction, but it can be considered as a buying opportunity.
There was a critical bearish trend line formed on the hourly chart of the USDCHF pair, which was breached recently and encouraged the US dollar buyers to take the pair higher. Currently, the pair is trading above the 0.90 resistance, but struggling to clear the 0.9040 pivot. So, there is a chance of a correction in the near term back towards the broken trend line where buyers might appear again. Moreover, the 23.6% fib retracement level of the last leg from the 0.8515 low to 0.9040 high is also around the same area. So, a lot of buying interest might be seen if the pair reaches towards the 0.8900-20 area.
On the upside, the last high of 0.9040 holds a lot of importance. Once it is breached, then the USDCHF pair might head towards the 0.9100 area.
Overall, one might consider buying dips around the broken trend line in the USDCHF pair as long as it is trading above 0.8900.
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Posted By IKOFX Technical Team: Online Forex Broker
Website – http://ikofx.com
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