USD/CHF: Support Eyed on the 50% Fib Level

0
168
USD/CHF Daily

USD/CHF Daily

It looks like the dollar rally has finally ran out of fuel! In light of the recent developments in the market, the currency has been dominating the Swiss franc since the beginning of July. However, it would seem that the disappointing NFP figure last Friday has given the Swiss franc a breather. USD/CHF failed to sustain its rally above the .9100 handle.

Right now the currency pair is trading at the 23.6% Fibonacci retracement level from the low established on July 14 at .8898 to the swing high at .9106 hit on July 30. Does this mean the dollar will soon resume its rally?

I wouldn’t be too excited about that yet, if I were you. For one, Stochastic indicates that the pair is still not yet oversold and could mean that there is more room for the pair to go lower. A more established area of support is the .9000 psychological handle. As you can see, it previously provided USD/CHF with resistance in June 2014.

It also looks like it would be where the rising trend line, 100 SMA, and 200 SMA will converge. Lastly, the area is where the 50% Fibonacci retracement level is located!

Watch out for the psychological handle as a break or bounce around it would be critical in determining where the currency pair is headed next.