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Forex Daily-Analysis | USDCHF

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USDCHF H1 Possible Bearish Gartley

The pair on Thursday fell sharply as the US Dollar remained on the back foot on improving global risk sentiment. Moreover, BOE’s decision to leave its current monetary policy stance unchanged further boosted the bearish sentiment surrounding the greenback, taking the pair sharply lower to test 50-day SMA support near 0.9760 region. The pair, however, staged a recovery after the release of better-than-expected weekly jobless claims and PPI data from the US and managed to close above 0.9800 handle (Forex Daily-Analysis).

Forex Daily-Analysis - USDCHF 1

USDCHF Downward Sales Potential

Currently, the USDCHF pair trades modestly flat at 0.9805, hovering within a striking distance of session lows reached previously at 0.9798. The major oscillates back and forth in a 20-pips narrow range, unable to find a clear direction amid a largely subdued US dollar and a cautious tone prevalent in the markets heading towards the European open. Next of relevance for the major remains the US economic releases due later in the NA session, with the inflation and retail trade figures eagerly awaited to gauge the strength of the US economy (Forex Daily-Analysis).

Forex Daily-Analysis - USDCHF 2

USDCHF Bearish Divergence

Spot is losing ground for the third consecutive session at the end of the week, falling below the 0.9800 handle in response to some sort of pick up in the demand for the safe haven CHF. Ahead in the session, the pair will remain under pressure in light of key releases across the Atlantic: CPI figures, Retail Sales, the Reuters/Michigan index and Business Inventories (Forex Daily-Analysis).

Forex Daily-Analysis - USDCHF 3

USDCHF Forex Daily-Analysis

Interim resistance stands at the confluence of the 50-line & the 6/28 close at 9820 with support eyed at the monthly open at 9760. Note that this level converges on the median-line extending off the highs & a longer-term parallel of the broader ascending formation off the lows. A break below would be needed to keep the short-bias in play targeting a more significant support targets at 9708 & 9664 – both areas of interest for possible short-side exhaustion / long-entries. Bottom line: heading into tomorrow’s U.S. data stream, the risk is for a move lower before resumption of the broader advance off the June low with a breach / close above 9880 needed to validate a breakout targeting subsequent topside objectives at the May high-day close at 9921, the 61.8% retracement at 9946 & parity.

Forex Daily-Analysis - USDCHF 4

USDCHF failed to hold above a key r Fibonacci resistance confluence earlier this week with a break below the weekly open shifting the immediate focus lower. A proposed pitchfork off the 6/28 & 7/13 highs further highlights key resistance & bearish invalidation at 9863/80 where the upper parallel converges on the 61.8% extension of the advance off the June low.

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Andrew Pial

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