Forex Analysis:USDCHF Approaching Support At 0.9450/60

Bottom line: USDCHF medium term structure remains bullish against 0.9150 lows. The propose…

Bottom line: USDCHF medium term structure remains bullish against 0.9150 lows. The proposed corrective drop from 0.9800 is approaching support around 0.9450. Traders might prepare to turn bullish again close to 0.9450/9500.

Fundamental Outlook:

USDCHF may reel under pressure and drop towards 0.9450 as NFP are expected to print another 8-10 Million. The unemployment rate set to rise to almost 20% will further add to US Dollar woes. Since the past few sessions the US Dollar has been hammered across the board, especially against the EURO, which is now trading close to 1.1350 mark.

Risk sentiment continued to soar high as SPX500 and Dow Jones are barely 10% away from their all-time highs. Investors continue to defy tensions between US and China, which deteriorated further as US blocked Chinese Airlines from American skies. It would be interesting to see if markets can continue rallying despite the factual economic damage caused due to COVID-19 pandemic.

GBPJPY has also managed to rally over 600 pips this week, trading above 138.00 as we write this article. The ongoing UK-EU Brexit talks and Japanese Yen decline as risk sentiment soars, might have played on the GBPJPY exchange rate.

Technical Analysis:

USDCHF bears remain in control as expected since recent swing highs around 0.9800 levels. We are expecting prices to drop towards 0.9450/60 zone, which is also the fibonacci 0.618 retracement of the previous rally between 0.9150 and 0.9900 respectively. The corrective drop might complete around 0.9450 and bulls back in control thereafter.

USDCHF had rallied sharply from 0.9150 through 0.9900 earlier. The bullish boundary is currently being retraced lower. It is quite possible that bears are successful to drag further towards 0.9335 levels before finding support. Any consistent drop beyond 0.9300 would be a threat to the above bullish structure.

Traders might be willing to take profits on short positions initiated around 0.9800/0.9850 if prices reach 0.9450/60. It is safe to be watchful before initiating longs positions around the 0.9450 fibonacci support.

Prepared by

Harsh Japee, Technical Analyst.

 

USDCHF Chart

 


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