Key Highlights
- The US Dollar declined recently and broke the 1.0050 support against the Swiss Franc.
- There is a key bullish trend line in place with support at 0.9990 on the 4-hours chart of USD/CHF.
- The US Building Permits in Dec 2018 increased 0.3%, while Housing Starts declined 11.2%.
- The US Durable Goods Orders figure for Jan 2019 will be released today, which could increase 0.2%.
USDCHF Technical Analysis
The US Dollar faced a strong resistance just below 1.0100 against the Swiss Franc. As a result, the USD/CHF pair started a major decline and broke the 1.0050 and 1.0040 support levels.
Looking at the 4-hours chart, the pair topped at 1.0098 and later dipped below the 23.6% Fib retracement level of the last wave from the 0.9905 low to 1.0098 high. More importantly, there was a break below the 1.0025 support and the 100 (red) simple moving average (4-hours).
The pair even traded below the 1.0010 support and the 50% Fib retracement level of the last wave from the 0.9905 low to 1.0098 high. However, there is a decent support formed near the 0.9980 level.
There is also a key bullish trend line in place with support at 0.9990 along with the 61.8% Fib retracement level of the same wave. If there is a downside break below the 0.9980 support, the pair could extend losses towards the 0.9950 and 0.9940 support levels.
On the other hand, if the 0.9980 support prevent losses, the pair could bounce back towards the 1.0050 and 1.0060 resistance levels in the near term.
Fundamentally, the US Building Permits figure for Dec 2018 was released recently by the US Census Bureau, at the Department of Commerce. The market was looking for a 2.8% decline in Building Permits, compared with the last increase of 5.0%.
However, the result was better than the forecast as there was an increase of 0.3% in Building Permits. On the other hand, there was a sharp decline in Housing Starts in Dec 2018 by 11.2%, whereas the market was looking for only -0.5%.
The US Dollar faced an increase in selling pressure, supporting EUR/USD and GBP/USD. Therefore, a successful break below 0.9980 in USD/CHF could spark further losses.
Economic Releases to Watch Today
- Euro Zone Consumer Confidence Feb 2019 – Forecast -7.4, versus -7.4 previous.
- Euro Zone Services Sentiment Feb 2019 – Forecast 11.0, versus 11.0 previous.
- US Durable Goods Orders for Jan 2019 – Forecast +0.2% versus +1.2% previous.
- US Pending Home Sales for Jan 2019 (YoY) – Forecast +0.4%, versus -2.2% previous.
- Canadian Consumer Price Index Jan 2019 (MoM) – Forecast +0.2%, versus -0.1% previous.
- Canadian Consumer Price Index Jan 2019 (YoY) – Forecast +1.5%, versus +2.0% previous.
