Key Highlights
- USD/CHF found support near 0.9055 and started an upside correction.
- There was a break above a major bearish trend line with resistance near 0.9110 on the 4-hours chart.
- The US Factory orders increased 6.2% in June 2020, more than the 5% market forecast.
- The US ISM Non-Manufacturing PMI could decline from 57.1 to 55.0 in July 2020.
USD/CHF Technical Analysis
The US Dollar traded to a new multi-week low at 0.9054 against the Swiss Franc before starting an upside correction. USD/CHF traded above 0.9120, but the pair is facing many hurdles on the upside.
Looking at the 4-hours chart, the pair recovered above the 0.9120 and 0.9150 resistance levels. There was a break above the 23.6% Fib retracement level of the downward move from the 0.9565 high to 0.9054 low.
Moreover, there was a break above a major bearish trend line with resistance near 0.9110 on the same chart. On the upside, the first major resistance is seen near the 0.9200 level. The main resistance is still near the 0.9250-0.9260 zone.
The 50% Fib retracement level of the downward move from the 0.9565 high to 0.9054 low is also near the 0.9260 level. A clear break above 0.9260 could open the doors for a larger recovery.
Conversely, the pair might start a fresh decline below the 0.9150 and 0.9120 levels. In the mentioned case, the pair could revisit the 0.9050 support zone in the near term.
Overall, USD/CHF must surpass 0.9200 and 0.9260 to start a substantial recovery. Looking at EUR/USD and GBP/USD, both are correcting lower below 1.1800 and 1.3100 respectively.
Upcoming Economic Releases
- Germany’s Services PMI July 2020 – Forecast 56.7, versus 56.7 previous.
- Euro Zone Services PMI July 2020 – Forecast 55.1, versus 55.1 previous.
- UK Services PMI July 2020 – Forecast 56.6, versus 56.6 previous.
- US Services PMI July 2020 – Forecast 49.6, versus 49.6 previous.
- US ISM Non-Manufacturing Index July 2020 – Forecast 55.0, versus 57.1 previous.
