USDCHF Rebounds after Dipping Towards 100 MA

Technical Bias: Bullish

Key Takeaways

• US dollar dives against the Swiss franc, but find buyers around the 100 simple moving average (4 hours).

• USDCHF has a major pivot area at 0.9780, which must be breached for more upsides.

• Today, the US Building Permits report will be released by the US Census Bureau, at the Department of Commerce which is expected to register a reading of 1.080M in March 2015.

USDCHF is kind of stuck in a range after declining sharply this week and it looks like waiting for a catalyst moving ahead.

Technical Analysis

The USDCHF this week failed to trade above the 0.9860 resistance area and traded lower. It also breached an important bullish trend line formed on the 4-hour chart to open the doors for more losses in the near term. However, the pair found buyers around a critical area, which was a meeting point for the 100 and 50 simple moving averages. The second most important point was that the pair also stopped right at the 50% fib retracement level of the last leg from the 0.9480 low to 0.9863 high. In short, there was a major barrier for sellers around 0.9670, which they failed to break. Currently, the pair is facing a resistance in the form of 200 SMA (4H).

If the USDCHF pair fails to move higher, then the 100 SMA might come into play again where buyers could be tested.

The 4H RSI started moving below the 50 level, which is a warning sign in the short term.

US Building Permits

Later during the NY session, the US Building Permits report will be released by the US Census Bureau, at the Department of Commerce. The forecast is of a reading of 1.080M in March 2015

Trade Idea

Buying dips in the USDCHF pair around the 100 SMA (4H) looks good as long as it stays above it.