USD/CHF poised for downside breakout, eyes US data

After facing rejection near channel resistance, USD/CHF carried on downside movement on Thursday, the pair is poised for a bearish breakout through daily triangle, according to technical analysis.

At the time of writing, the pair is being traded around 0.8965. Near term resistance may be seen around upper channel of triangle that is currently at 0.9023. A daily close above channel resistance could expose 0.9070 which is 38.2% fib level, before 0.9155 i.e. swing high of 21^st January.

On downside, first support can be noted near lower channel which is at the time of writing around 0.8946, a breakout through lower channel of daily triangle might accelerate the bearish momentum thus targeting 0.8882 i.e. 76.4% fib level, and then 0.8800, psychological level as well as swing low of previous wave.

Just a few moments ago, Germany’s harmonised index of consumer prices for the month of January was released. Analysts had predicted 1.2% Year over Year (YoY) reading; the actual result came broadly in line with expectations. Now investors are waiting for European Central Bank (ECB) monthly report for January which is scheduled for release in next couple of hours. As USD/CHF is negatively correlated to EUR/USD, so volatility is expected in USD/CHF price following European releases.

Later in the US session, Retail sales data for the month of January is due, analysts have predicted 0.0% MoM reading for January compared with 0.2% reading in December. Similarly, initial jobless claims data is another major development for today because labor market outcomes are directly linked to tapering in monthly asset purchase program. Then, Fed new chairwoman Janet Yellen is scheduled to speak, her remarks might stir volatility across financial markets. 

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips (additional fees may apply). Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.