usdchf is the dollar headed for more downside 1503772015
<p>With the exception of January’s massive plunge that was prompted by the Swiss National Bank (SNB) removing the exchange rate floor on the value of […]</p>
Share this:
With the exception of January’s massive plunge that was prompted by the Swiss National Bank (SNB) removing the exchange rate floor on the value of the euro versus the Swiss franc, thereby compelling the franc to skyrocket, the USD/CHF currency pair generally reflects overall US dollar movement relatively well.
Tuesday saw a sharp drop for USD/CHF as the dollar pulled back on continued market expectations that a Fed rate hike could potentially be delayed beyond the end of the year. This drop resulted in a tentative breakdown below a large rising wedge pattern that has been in place since mid-August. While a rising wedge pattern represents gradually increasing prices within a consolidation, the potential resolution of such a pattern is most often viewed as bearish. The trigger for this bearish outlook would be a confirmed breakdown below the lower border of the pattern.
As USD/CHF has made just a tentative breakdown of the wedge, the pattern completion has not been confirmed yet. With any further move to the downside during the remainder of the week, however, the dollar could find itself extending its current pullback after its recent period of substantial strength.
For more than a week, USD/CHF has been declining from key resistance around the 0.9850 area. From a slightly longer-term perspective, since the multi-year high of 1.0239 was hit in mid-January, just a day before the noted SNB-driven crash, USD/CHF has followed a relatively well-defined downtrend resistance line with progressively lower highs. Although this was NOT accompanied by progressively lower lows, the downtrend line exhibits recurring pressure on the currency pair. Having just retreated from this trend line a little more than a week ago, USD/CHF could continue to undergo short-term pressure to pull back further.
On any continued and confirmed breakdown below the wedge pattern, the next major downside target is around the key 0.9500 support level. To the upside, dynamic resistance continues to reside at the noted downtrend line that extends from January.
Related tags:
Latest market news
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.