Remember that channel resistance play that we talked about a few days ago? Well, USD/CHF has already slipped to fresh monthly lows since then.
Now it’s bouncing back a bit, which could be the market’s way of giving us another shot at riding the downtrend.
Check out USD/CHF’s 4-hour chart!
USD/CHF 4-hour Forex Chart by TradingView
The U.S. dollar has been losing pips to its counterparts as more traders price in a potentially more dovish Fed decision later this month.
The Swiss franc, on the other hand, is soaking up safe haven flows with the Russia-Ukraine conflict dragging on and stagflation worries bubbling in the U.S.
The Greenback did catch a breather with bond yields pushing higher, but all eyes are on the August inflation release as it could decide whether USD/CHF keeps sliding.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the Swiss franc, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
USD/CHF, which has been making lower highs and lower lows since early August, recently bounced from its .7915 September lows to trade closer to the .7975 zone.
Right now, prices are rubbing up against the broken channel support and the 38.2% Fib of September’s drop. If buyers stick around and we see a couple more green candlesticks, the pair could make a run at .8000 near the Pivot Point and 50% Fib, or even stretch toward .8040 at the top of the channel.
If sellers jump back in here though, this bounce might just turn into a classic break-and-retest scenario that drags USD/CHF into fresh September lows.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
