Technical Bias: Bearish
Key Takeaways
US dollar continued its decline against most major currencies, as sellers remain in control.
Dollar sellers await Federal Reserve Chairwoman Jannet Yellen’s speech for further action moving ahead.
US building permits release is also lined up during NY session with forecast slated for a 4.8% rise.
This week’s drop in USDCHF has left the pair at critical crossroads. The pair briefly ticked below the 200 SMA (4H), which represents a major support area. The primary indicators have also taken a sharp turn and pointing lower in the short term.
Technical Analysis
USDCHF settled in the vicinity of the 0.9400 handle where is found support in the form of a triangle. There is a contracting triangle formed on the 4 hour timeframe of the USDCHF pair. Yesterday, the pair bounced time and again from the 0.9400 area, which was around the triangle. The most important point is that the pair managed to close below the 200 SMA (4H) yesterday and formed RSI divergence. If at all the pair manages to recover from the current levels, then it might find resistance around the 0.9440-50 area. An upside momentum should be limited considering the current market sentiment as RSI managed to bounce a couple of times from the oversold readings, but failed to encourage the US dollar buyers.
On the downside, the next level of interest is around the last swing low of 0.9299 where the US dollar buyers might take a stand. However, one cannot deny that the dollar might take a turn at any point of time moving ahead.
Yellen’s To Cause Moves?
There is an important event lined up during the NY session, as the Federal Reserve Chairwoman, Jannet Yellen will be delivering a speech. Her remarks might cause a lot of moves in the US dollar, and that’s why we need to keep a close eye on this one.
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