USDCHF Slow and Steady Uptrend

Technical Bias: Bullish

Key Takeaways

• US dollar continued to gain traction against the Swiss franc, and traded higher to test the 0.9500 resistance area.
• US Manufacturing Purchasing Managers Index (PMI) will be released by the Markit Economics today, which is expected to register a minor decline from 53.9 to 53.8.
• USDCHF has support around the 0.9400 area and resistance on the upside at 0.9550.

US dollar buyers took the USDCHF pair higher during this week, and it looks set for more gains in near term.

Technical Analysis

The USDCHF pair after consolidating for some time in a range managed to gain ground and broke an important resistance area of 0.9400 to trade higher. The pair is now comfortably placed above the 200 simple moving average (SMA) – 4hour, which can be considered a positive sign in the short term. There is a solid bullish trend line formed on the 4 hour chart as well, which is colliding with the 200 SMA (4H). Moreover, the 50 SMA (4H) is also aligning with the same area, which increases the importance of 0.9350. On the upside, an immediate resistance can be seen around the 0.9550-60 area.

If the USDCHF pair moves lower from the current levels, then it might face hurdle around the 23.6% Fibonacci retracement level of the last leg from the 0.9175 low.

Any further losses might take it towards the 38.2% fib level, which can also be considered as a pivot area.

US Manufacturing PMI

Later during the London session, the US Manufacturing Purchasing Managers Index (PMI) will be released by the Markit Economics. The forecast is slated for a minor decline from 53.9 to 53.8. Any better outcome might push the USDCHF pair higher.

Trade Idea

One might consider buying dips in USDCHF around the 0.9400 area considering the long term view with a stop below 200 SMA (4H).