USD is having trouble extending its upswing above a key resistance area.
Will the pair extend its months-long downtrend?
Or will this week’s events force an upside breakout for the dollar?
USD/CHF 4-hour Forex Chart by TradingView
As you can see, USD/CHF found support from the .8400 psychological handle and is currently near a potential resistance zone.
We’re looking at the R1 (.8519) Pivot Point line, which isn’t far from the 100 SMA and a trend line resistance that’s been around since early July.
Are dollar bulls done driving USD higher?
The U.S. is printing its August inflation data this week, which could help traders determine how aggressive the FOMC may be when it cuts its interest rates next week.
The Swiss franc – a popular safe haven and USD counterpart – could draw in bullish demand if this week’s market themes turn against the Greenback.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the Swiss franc, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Look out for bearish candlesticks and sustained trading below the R1 Pivot Point, which opens USD/CHF to a move back to the .8400 descending triangle support.
And, if it turns out that the third time’s the charm and USD/CHF busts through .8400, then the pair could head for its December lows near .8330.
However, we’re not discounting further gains for USD/CHF.
Sustained trading above the 100 SMA could draw in USD bulls and push USD/CHF back to the descending triangle resistance, 200 SMA, and R2 (.8610) Pivot Point area. And if the bulls win that tug-o-pips and push USD/CHF above the resistance, the pair could revisit higher areas of interest like .8730 or .8800.
Also, if you trade USD/CHF, don’t forget to consider currency correlations with other major currency pairs!
Good luck and good trading this one, forex friends!