USD/CHF testing key resistance following mixed US data
Today’s US data releases didn’t cause a massive reaction, which means the dollar has remained supported – for now. Among the dollar pairs to watch for a potential upside breakout is the USD/CHF.
US GDP was revised unexpectedly lower to 2.7% from 2.9% in the initial estimate, but this was offset by GDP price index, which was revised up to 3.9% from 3.5%, meaning more inflation. GDP is backward looking data, so the market has not attached too much importance to it. More to the point, the jobs market remains hot, and we saw more evidence of that today with unemployment claims falling to 192k, well below expectations.
This should keep the dollar bulls happy I reckon. Core PCE price index (Fed’s favourite measure of inflation) is due tomorrow.
The USD/CHF was testing an important resistance area around 0.9325 to 0.9370ish. Previously this area was resistance. We have already seen price break above the short-term bear trend and the 21—day exponential moving average. What the bulls will want to see next is a clean move above the aforementioned resistance area to completely turn the tide. Specifically, a move north of 0.9410 could trigger a short-squeeze rally towards the 200-day average at 0.9575.
Meanwhile, the bears will now want to see a clear evidence of price topping out, before potentially stepping in on the short-side. A move below this week’s low at 0.9220 could be the trigger they are looking for.
As things stand, the bulls are edging it, but now need fresh impetus to move rates above that 0.9325 to 0.9370 resistance range, in order to trigger fresh follow-up technical buying.
-- Written by Fawad Razaqzada, Market Analyst with FOREX.com
Follow Fawad on Twitter @Trader_F_R
US GDP was revised unexpectedly lower to 2.7% from 2.9% in the initial estimate, but this was offset by GDP price index, which was revised up to 3.9% from 3.5%, meaning more inflation. GDP is backward looking data, so the market has not attached too much importance to it. More to the point, the jobs market remains hot, and we saw more evidence of that today with unemployment claims falling to 192k, well below expectations.
This should keep the dollar bulls happy I reckon. Core PCE price index (Fed’s favourite measure of inflation) is due tomorrow.
The USD/CHF was testing an important resistance area around 0.9325 to 0.9370ish. Previously this area was resistance. We have already seen price break above the short-term bear trend and the 21—day exponential moving average. What the bulls will want to see next is a clean move above the aforementioned resistance area to completely turn the tide. Specifically, a move north of 0.9410 could trigger a short-squeeze rally towards the 200-day average at 0.9575.
Meanwhile, the bears will now want to see a clear evidence of price topping out, before potentially stepping in on the short-side. A move below this week’s low at 0.9220 could be the trigger they are looking for.
As things stand, the bulls are edging it, but now need fresh impetus to move rates above that 0.9325 to 0.9370 resistance range, in order to trigger fresh follow-up technical buying.
-- Written by Fawad Razaqzada, Market Analyst with FOREX.com
Follow Fawad on Twitter @Trader_F_R
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