Key Highlights
- The US Dollar climbed higher this week and moved above 0.9840 against the Swiss Franc.
- There is a short-term bullish trend line forming with support at 0.9880 on the 4-hours chart of USD/CHF.
- The US New Home Sales in Sep 2017 increased by 18.9% (MoM), better than the forecast of -0.9%.
- Today, the US Pending Home Sales for Sep 2017 will be released, which is forecasted to increase by 0.2% (MoM).
USDCHF Technical Analysis
The US Dollar surged higher during the past few days and moved above the 0.9800 handle against the Swiss Franc. The USD/CHF pair is now placed well in the bullish zone above 0.9840.
The pair recently traded as high as 0.9939 and started correcting lower. It tested the 23.6% Fib retracement level of the last wave from the 0.9736 low to 0.9939 high.
On the downside, there is a short-term bullish trend line forming with support at 0.9880 on the 4-hours chart. However, the most important support is close to 0.9840 and the 50% Fib retracement level of the last wave from the 0.9736 low to 0.9939 high.
The overall trend remains bullish for USD/CHF and dips towards 0.9850-40 are most likely to find buyers in the near term.
US New Home Sales
Recently in the US, the number of New Home Sales for Sep 2017 was released by the US Census Bureau. The forecast was slated for a decline in sales by 0.9% compared with the previous month.
The actual result was better than the forecast, as there was a rise in sales by 18.9% to a seasonally adjusted annual rate of 667,000. However, the last reading was revised down from -3.4% to -3.6%.
Looking at the Housing Price Index in August 2017, there was a rise of 0.7% compared with the previous month, and more than the forecast of +0.4%.
The report stated:
For the nine census divisions, seasonally adjusted monthly price changes from July 2017 to August 2017 ranged from -0.1 percent in the New England division to +1.4 percent in the Pacific division. The 12-month changes were all positive, ranging from +5.0 percent in the Middle Atlantic division to +9.3 percent in the Pacific division.
Overall, the USD/CHF pair has no reason to move down and likely to remain supported above 0.9880-0.9860 in the near term.
Economic Releases to Watch Today
ECB Interest Rate Decision – Forecast 0%, versus 0% previous.
US Initial Jobless Claims – Forecast 253K, versus 222K previous.
US Pending Home Sales for Sep 2017 (MoM) – Forecast +0.2%, versus -2.6% previous.
US Goods Trade Balance Sep 2017 – Forecast $-63.80B, versus $-62.94B previous.
