Key Highlights
- The US Dollar started a fresh decline from 0.9970 against the Swiss Franc.
- A crucial bearish trend line is forming with resistance near 0.9940 on the 4-hours chart of USD/CHF.
- The US GDP grew 1.9% in Q3 2019 (Prelim), more than the market forecast of 1.6%.
- The US Personal Income could rise 0.4% in Sep 2019 (MoM), more than the last +0.2%.
USD/CHF Technical Analysis
After a strong rise above 0.9900, the US Dollar struggled to continue above 0.9970 against the Swiss Franc. As a result, there was a fresh decline in USD/CHF below the 0.9940 support area.
Looking at the 4-hours chart, the pair declined heavily below 0.9920 and the 100 simple moving average (red, 4-hours). It opened the doors for more losses below 0.9900 and the 200 simple moving average (green, 4-hours).
The pair even broke the 61.8% Fib retracement level of the upward move from the 0.9840 low to 0.9970 high. At the moment, the pair is approaching the 0.9860 support area, plus the 76.4% Fib retracement level of the upward move from the 0.9840 low to 0.9970 high.
If there are more downsides, the pair could revisit the last swing low of 0.9840. Any further losses might set the pace for more losses towards 0.9800.
Fundamentally, the US Gross Domestic Product report for Q3 2019 (Prelim) was released by the US Bureau of Economic Analysis. The market was looking for an increase of 1.6% in Q3 2019.
However, the actual result was positive, as the US GDP grew at 1.9%, but down from the last reading of 2%.
The report added:
The deceleration in real GDP in the third quarter reflected decelerations in PCE, federal government spending, and state and local government spending, and a larger decrease in nonresidential fixed investment.
Overall, USD/CHF could continue to decline towards the 0.9840 and 0.9800 supports. Looking at EUR/USD, the pair is climbing higher towards 1.1200 and GBP/USD is back above 1.2900.
Upcoming Economic Releases
- Euro Zone GDP Q3 2019 (Preliminary) (QoQ) – Forecast 0.1%, versus 0.2% previous.
- Euro Zone CPI for Oct 2019 (YoY) (Prelim) – Forecast +0.7%, versus +0.8% previous.
- Euro Zone Core CPI for Oct 2019 (YoY) (Prelim) – Forecast +1%, versus +1% previous.
- US Personal Income for Sep 2019 (MoM) – Forecast +0.4%, versus +0.2% previous.
- US Initial Jobless Claims – Forecast 243K, versus 244K previous.
