Price & Time: Top Looming In USDCHF

Technical Bias: Neutral   

Key Takeaways

• US dollar continued to rise against the Swiss franc after breaching an important resistance area.
• 0.9270 might act as a strong hurdle for the USDCHF pair in the medium-term if reached.
• USDCHF support seen at 0.9150 and resistance ahead at 0.9270.

The US dollar gains might pause against the Swiss franc around the 0.9270 area, as it represents a critical swing area for the USDCHF pair.

Technical Analysis

There was a monster bearish trend line on the weekly timeframe for the USDCHF pair, which was broken two weeks ago. This particular break was critical, and caused solid gains in the pair. The pair is now trading above all three important simple moving averages (200, 100 and 50) on the weekly chart. However, there is one more aspect which we need to keep in mind, and that is the pair is heading towards a crucial swing resistance area around the 0.9260-80 area. The 50% Fibonacci retracement level of the last drop from the 0.9840 high to 0.8699 low is also around the mentioned area. So, there is a great chance that the pair might struggle to break the 0.9260-80 resistance zone if reached. If the US dollar buyers manage to achieve this tough task, then a move towards the 61.8% fib level might be on the cards.

On the downside, initial support can be seen around an important confluence area of 100 and 200 weekly SMA’s at 0.9150. Any further correction could take the pair closer to the broken trend line, which might act as a support in the near term.

Moving Ahead

The US nonfarm payrolls data might act as a catalyst for the US dollar this week. Overall, staying on the sidelines seems like a wise option until the pair corrects substantially to present a solid buying opportunity.