On its daily time frame, it can be seen that USD/CHF is still in a valid downtrend with a large correction made to a forex resistance level. The pair is currently testing the .8950 minor psychological level and 61.8% Fibonacci retracement level after the US economy printed a 192K gain in hiring for the month of March.
Stochastic is already in the overbought zone, indicating that dollar sellers are ready to push the pair back down. A downward crossover and a move below the 75.00 level would indicate that selling pressure has already mounted. In that case, USD/CHF might make a move back down to its previous lows near the .8600 major psychological support level.
On the other hand, more gains for the pair could mean that the current downtrend is already over and that a sustained rally could be in the cards. After all, the SNB is intent on keeping the franc weak and the upcoming release of the foreign currency reserves and CPI data might indicate if the central bank can afford to hold on to the franc peg.
More Sellers on USD/CHF Forex Resistance
The FOMC minutes are up for release this week and this might be the catalyst that USD/CHF needs to fall below its forex resistance level at .8950. Shorting at market with a stop of 100 pips and a target at .8600 could be an option in playing this FOMC event.
Take note as well that a spinning top candlestick has also formed right on the forex resistance level, indicating hesitation among both buyers and sellers. A daily candle close below the low of this spinning top might indicate that bears are stronger at the moment and have enough fuel to take the pair south.
On the other hand, a daily candle close above the recent high of the spinning top would show that dollar bears are not ready to let up.
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