Analysis of USDCHF Technical in Forexlive

USD

CHF

• The SNB kept interest rates steady at 1.75% vs. 2.00% expected as the
  central bank sees the significant tightening in recent quarters countering the
  remaining inflationary pressures.
• The SNB Governor Jordan said that “the central bank will
  not hesitate to tighten monetary policy further if necessary”, but the
  conditions at the moment do not call for further tightening at all.
• The Switzerland CPI ticked higher recently but the
  inflation rate is comfortably in the SNB’s 0-2% target band for both the
  headline and core measures.
• The Unemployment Rate matched the
  previous reading hovering at cycle lows.
• The Manufacturing PMI missed expectations and fell
  further into contraction, while the Services PMI remain in expansion.
• The market doesn’t expect the SNB to
  hike anymore.

USDCHF Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCHF broke
below the low at 0.8888 as the disappointing US data recently weighed on the US
Dollar. The bias is now skewed to the downside as the price has been printing
lower lows and lower highs with the moving averages being
crossed to the downside. From a risk to reward perspective, the best place to
short for the sellers would be around the downward trendline where
there’s also the confluence with the
50% Fibonacci retracement level,
the previous swing low and the red 21 moving average.

USDCHF Technical Analysis –
4-hour Timeframe

On the 4-hour chart, we can see that since the
break below the low, the price has been diverging with the
MACD. This is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we should see a pullback into the previous low around
the 0.8888 level where we can also find the 38.2% Fibonacci retracement level
for confluence. This is where more aggressive sellers are likely to step in
with a defined risk above the level to target new lows.

USDCHF Technical Analysis –
1-hour Timeframe

On the 1-hour chart, we can see more
closely the current price action with a meaningful level at 0.8855 as the price
reacted to it multiple times. A break above this level should see more buyers
piling in to target the 0.8888 resistance.
Moreover, if the price then breaks above the 0.8888 level as well, the sellers
will likely fold fast and the buyers will increase the bullish bets into the
next resistance around the trendline.

Upcoming Events

Today we will get the latest US Jobless Claims report
which is probably going to be the most important release of the week. Tomorrow,
the US will be on holiday for Thanksgiving Day and therefore the liquidity in
the market will be thinner. On Friday, we conclude the week with the latest US
PMIs.