USDCHF trading has been inside a rising channel for nearly a month before the ECB rate decision last week triggered a sharp break lower. Since then price has made a decent correction close to the bottom of the channel.
Stochastic is moving down from the overbought area, indicating that a USDCHF trading selloff may be in the cards. This could be enough to push the pair to new lows, possibly until the .8800 major psychological support if the downtrend persists.
Shorting on a pullback to the .8950 broken channel support with a stop inside the channel and a target of .8850 could yield a 3:1 return on risk for a short-term trade.
USD/CHF Forex Signal Outlook
Data from Switzerland has shown some improvement, which might be enough to keep the Swiss franc supported in the next trading sessions. Switzerland printed a better than expected CPI of 0.3% while the foreign currency reserves data came in line with expectations at 444.4 billion CHF, suggesting that the SNB may still have room to defend the franc peg if needed.
Should the SNB decide to act, USDCHF trading could head higher, possibly to retest the top of the channel or the .9000 major psychological resistance. However, weak underlying data from the US economy could still undermine dollar strength and keep any USDCHF trading rallies at bay.
Take note though that US non-farm payrolls figure came in close to expectations as it posted a 217,000 gain in hiring versus the estimated 214,000 increase. The previous month’s reading was revised slightly lower from 288,000 to 282,000 yet the jobless rate managed to hold steady at 6.3% as the participation rate improved.
There are barely any top-tier reports on this week’s set, save for the US retail sales release which might spark USDCHF trading volatility mid-week.
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