The US Dollar (USD) continued downside movement against the Swiss Franc (CHF) on Monday, dragging the price of USDCHF to less than 0.9850 following the Friday’s Nonfarm Payrolls. The technical bias remains bullish due to a Higher High and Higher Low in the ongoing wave on daily chart.
As of this writing, the pair is being traded around 0.9831. A hurdle may be noted near 0.9850, the psychological number ahead of 0.9860, the swing high of Friday as demonstrated in the following daily chart.
On the downside, the pair is expected to find a support around 0.9700, the psychological number ahead of 0.9674, the 76.4% fib level and then 0.9558, the 61.8% fib level. The technical bias will remain bullish as long as the 0.9524 support area is intact.
US Nonfarm Payrolls
The US Bureau of Economic Analysis released the Nonfarm Payrolls report on Friday. The report showed that the U.S. gained 215,000 jobs in July, largely matching expectations, and the unemployment rate stayed pat at 5.3%. The solid employment data offers little reason to upend Federal Reserve Chairwoman Janet Yellen’s plan to lift rates, possibly at the next two-day meeting of the Federal Open Market Committee, which begins on Sept. 16. Generally speaking, an increase in the benchmark interest rate is seen as positive for the US Dollar (USD) and vice versa thus expectations about interest rate hike spurred bullish momentum in the price of USDCHF and other dollar pairs across the board.
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term if we get a bearish pin bar or bearish engulfing candle on daily chart. The trade should however be stopped out on a daily closing above the 0.9860 resistance area.
Trade global forex with the best ECN broker of 2021*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, best ECN broker of 2021, according to the IAFT