USD/CHF Price Analysis: Correction meets support around 0.9350, focus shifts to US PMI

USD/CHF is likely to display a volatility contraction ahead of Swiss GDP and US Manufacturing PMI data.
The Swiss Franc asset has struggled in extending recovery above the horizontal resistance placed around 0.9410.
A slippage from the RSI (14) into the 40.00-60.00 range indicates a loss in the upside momentum.

Sagar Dua FXStreet

The USD/CHF pair is building an intermediate cushion around 0.9350 after a steep correction from above 0.9420 in the early Tokyo session. The Swiss franc asset is expected to turn sideways ahead of the release of the Swiss Gross Domestic Product (GDP) (Q4) and United States ISM Manufacturing PMI data.

On an annualized basis, Swiss GDP is expected to report a contraction of 1.2% vs. an expansion of 0.5% released earlier. As per the consensus, the Swiss economy is expanded by 0.3% in Q4, higher than the 0.2% growth delivered in Q3.

The US ISM Manufacturing PMI is expected to improve to 48.0 from the former release of 47.4. A figure below 50.0 is considered a contraction in activities. Therefore, it would be worth calling it a decline in contraction.

A rebound in the risk appetite of the market participants resulted in a revival for S&P500 after diving last week. The US Dollar Index (DXY) is expected to display a volatility contraction around 104.20.

USD/CHF has corrected after struggling to extend recovery above the horizontal resistance placed from January 6 high around 0.9410. Earlier, the Swiss Franc asset delivered a breakout of the resistance plotted from January 31 high at around 0.9290, which resulted in a bullish reversal. The major is expected to display a volatility contraction pattern before printing a fresh upside.

Advancing 20-and 50-period Exponential Moving Averages (EMAs) at 0.9361 and 0.9316 respectively, add to the upside filters.

The Relative Strength Index (RSI) (14) has slipped into the 40.00-60.00 range from the bullish range of 60.00-80.00, which indicates a loss in the upside momentum.

For a fresh upside, the asset needs to deliver a break above February 27 high at 0.9429, which will drive the major toward December 6 high at 0.9456 followed by November 25 high around 0.9500.

In an alternate scenario, a breakdown below February 9 low at 0.9161 will drag the asset toward the round-level support at 0.9100. A slippage below the latter will drag the asset toward the February low at 0.9059.

USD/CHF four-hour chart

USD/CHF

Overview
Today last price	0.9361
Today Daily Change	-0.0047
Today Daily Change %	-0.50
Today daily open	0.9408

Trends
Daily SMA20	0.9239
Daily SMA50	0.9251
Daily SMA100	0.9465
Daily SMA200	0.9573

Levels
Previous Daily High	0.9409
Previous Daily Low	0.9326
Previous Weekly High	0.9409
Previous Weekly Low	0.9221
Previous Monthly High	0.941
Previous Monthly Low	0.9085
Daily Fibonacci 38.2%	0.9377
Daily Fibonacci 61.8%	0.9357
Daily Pivot Point S1	0.9353
Daily Pivot Point S2	0.9298
Daily Pivot Point S3	0.927
Daily Pivot Point R1	0.9436
Daily Pivot Point R2	0.9464
Daily Pivot Point R3	0.9519

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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