Forex Analysis:USDCHF Bulls Hold Above 0.9000 Handle

Bottom line: USDCHF medium to long term structure remains bullish against 0.9000 lows. The…

Bottom line: USDCHF medium to long term structure remains bullish against 0.9000 lows. The currency has managed to take out resistance at 0.9200 handle and is currently pulling back. Bulls might be poised to remain in control and push through 0.9450/0.9500 resistance over the next few weeks.

 Fundamental Outlook:

USDCHF is holding above its 0.9000 lows carved earl this month. The exchange rate is trading close to 0.9080/85 levels as we prepare to publish and is expected to remain well bid over the next several weeks. The US Dollar Index (DXY) might be indicating further strength as it holds above 91.75 mark. Further, a return in risk aversion might only add to the US Dollar strength.

GBPJPY has dropped over 800 pips since 142.72 highs on September 01, 2020. The exchange rate had dropped through 134.50 yesterday before finding some bids. The Bank of England has keep rate decision unchanged to 0.1% and might be thinking to implement a negative interest rate policy.

The dovish stance by BoE, possibility of a hard or No-Brexit deal and fears of a second wave of COVID-19 infections might keep the exchange rate under pressure. GBPUSD had also dropped from its 1.3483 highs early this month to 1.2760 lows before finding some bids.

Technical Analysis:

USDCHF had dropped through 0.9000 levels on September 01, 2020 before turning bullish. The currency managed to push through 0.9200 mark, taking out initial resistance. Also note that bulls registered themselves and might remain in control for long.

USDCHF seems to be correcting for now and has already reached the fibonacci 0.618 retracement around 0.9075 levels. Probability remains for a bullish turn from here if 0.9000 stays intact. Bulls might be looking to push towards the next in line resistance around 0.9450/0.9500 in the near term.

Further, a conventional inverted Head & Shoulder pattern might be unfolding with its right shoulder being carved around 0.9070/75 levels. The left shoulder was in the vicinity of 0.9052, while head remains around the 0.9000 mark acting as potential support.

Most traders might be preparing to initiate fresh long positions around 0.9050/80 zone, with protective stops just below 0.9000 handle and projected targets above 0.9450/0.9500 respectively. Only a consistent drop below 0.9000 mark would change the above bullish structure.

Prepared by

Harsh Japee, Technical Analyst.

 

USDCHF Chart

 

Disclaimer:

“This market commentary and analysis has been prepared for AT Global Markets UK Ltd (ATFX UK) by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such.

You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.

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