US Dollar Slopfest Will Produce Next Trend Move

Technical Bias: Bullish

Key Takeaways

• US dollar corrected sharply Intraday which can be seen as a stop hunt for the next trend move.

• EURUSD was one of the major gainers as it posted a massive correction of more than 60 pips considering the current market sentiment for the Euro.

• USDCHF got rejected around an important fib level at 0.9607.

Looking Ahead, there is a possibility of further retracement in the US dollar which can be considered as a buying opportunity.

Technical Analysis

There was a monster triangle formed on the 4 hour timeframe for the USDCHF pair, which was breached earlier during this week. The pair climbed towards the 76.4% Fibonacci retracement level of the last drop from the 0.9683 high to 0.9362 low where it found sellers. There was a solid selling interest noted around the mentioned fib level, as the pair was completely rejected and moved lower. However, if it continues to move lower, then the broken triangle might come into play again. It could act as a support in the near term and the most important point is that the 100 and 50 SMAs are also sitting around the same area. So, the US dollar buyers might appear around 0.9500 to protect further downside and ignite a new trend moving ahead.

On the upside, the recent rejection level might continue to act as a monster resistance for the USDCHF pair. Only a break and close above the same could take it back towards the last swing high of 0.9683. In the medium term, a test of 0.9700 cannot be denied.

Moving Ahead

There are a couple of low-risk events lined up during the NY session today. The chance of a major move is very less and we might mostly witness ranging moves. We need to be very careful, as it is the month end and anything is possible in such conditions.