. USD/CHF Technical Analysis: Trading Opportunities Unveiled

USD/CHF Technical Analysis: Trading Opportunities Unveiled

USD/CHF Technical Analysis: Trading Opportunities Unveiled

05 Jan 2024

USD/CHF is trading in the vicinity of 0.8500, benefiting from a stronger US Dollar, with anticipation for upcoming US labor data.

FUNDAMENTAL OVERVIEW:

  • USD/CHF maintains slight gains as the US Dollar recovers from its recent decline.
  • The prevalent risk-off sentiment, influenced by anticipated sluggish global growth, lends support to the Greenback.
  • Market participants are eagerly anticipating crucial Swiss Inflation and Real Retail Sales data for additional insights into the economic landscape.

USD/CHF continues its upward momentum for the second consecutive session, benefitting from a strengthened US Dollar (USD) amidst a risk-off sentiment driven by anticipated global economic sluggishness at the close of 2024. Improved US Treasury yields buoy the US Dollar Index (DXY). Furthermore, positive labor data from the United States (US) on Thursday has helped limit the Greenback’s losses. As the Asian session unfolds on Friday, the USD/CHF pair trades near 0.8500.

In December, the employment scenario in the United States witnessed a significant improvement, as reflected in the ADP Employment Change report, which indicated the addition of a substantial 164,000 new positions. This surpassed the previous month’s figure of 101,000 and the market’s expectation of 115,000. Additionally, the Initial Jobless Claims for the week ending on December 29 showed a decline in unemployment benefit claims, dropping to 202,000 from the prior 220,000, surpassing the expected 216,000. Traders are eagerly anticipating further data from the US employment market, with a keen focus on key indicators such as Average Hourly Earnings and Nonfarm Payrolls (NFP) data for December.

Conversely, the Swiss Franc (CHF) seems to have encountered a restriction in its decline, possibly due to intervention in the foreign exchange market by the Swiss National Bank (SNB). Additionally, the release of the SVME Manufacturing Purchasing Managers Index (PMI) for December on Wednesday indicated improvement, with the figure ascending from the previous 42.1 to 43.

Market participants are anticipating significant data releases from Switzerland, such as the Consumer Price Index and Real Retail Sales, scheduled for unveiling on Monday. These releases hold significance as they can provide crucial insights into the economic well-being of Switzerland, potentially impacting market sentiments and guiding trading decisions in the USD/CHF pair.

USD/CHF TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

USD/CHF is currently trading within a down channel.

USD/CHF is positioned above 5&20 the Moving Averages (SMA).

The Relative Strength Index (RSI) is in the buying zone, while the Stochastic oscillator suggests a Positive trend.

Immediate Resistance level: 0.8549

Immediate support level: 0.8470

HOW TO TRADE USD/CHF

After a rapid upward movement, USD/CHF encountered resistance, leading to a decline until it reached support. Subsequently, the price reversed its direction to the upside. Currently, USD/CHF is approaching a significant resistance zone. If this zone is breached and USD/CHF maintains a position above it, further upside movement can be anticipated.

TRADE SUGGESTION- STOP BUY– 0.8561, TAKE PROFIT AT- 0.8687, SL AT- 0.8473.