Key Highlights
The US Dollar gained traction above the 1.0000 resistance against the Swiss Franc.
USD/CHF broke a crucial bearish trend line at 0.9995 on the 4-hours chart.
The US ADP Employment declined from the last revised reading of 300K to 183K in Feb 2019.
The US Initial Jobless Claims for the week ending Feb 26, 2019 will be released today, which could remain at 225K.
USDCHF Technical Analysis
The US Dollar started a solid upward move from the 0.9926 low against the Swiss Franc. The USD/CHF broke the 0.9965 and 1.0000 resistance level to move into a bullish zone.
Looking at the 4-hours chart, the pair traded above many resistances on the way up, including the 200 simple moving average (green, 4-hours) and 1.0010. There was a break above the 50% Fib retracement level of the last drop from the 1.0098 high to 0.9926 low.
More importantly, the pair broke a crucial bearish trend line at 0.9995 on the same chart. Finally, the pair closed above the 1.0020 resistance and the 100 simple moving average (red, 4-hours).
The current price action is positive and it seems like the pair could gain traction above the 76.4% Fib retracement level of the last drop from the 1.0098 high to 0.9926 low. Once there is a successful close above the 1.0065 resistance, the pair is likely to revisit the 1.0098 high formed in February 2019.
On the other hand, if there is a downside correction, the pair could find support near the 1.0020 level and the 100 simple moving average (red, 4-hours).
Fundamentally, the US ADP Employment change report for Feb 2019 was released recently. The market was looking for a minor drop from the last reading of 213K to 189K.
The result was mixed as the ADP Employment change came in at 183K, but the last reading was revised up from 213K to 300K, on a seasonally adjusted basis. Commenting on the report, Mark Zandi, chief economist of Moody’s Analytics, stated:
The economy has throttled back and so too has job growth. The job slowdown is clearest in the retail and travel industries, and at smaller companies. Job gains are still strong, but they have likely seen their high watermark for this expansion.
Overall, the US Dollar buyers remain in control, but there could be a short-term downside correction in USD/CHF and recoveries in EUR/USD and GBP/USD.
Economic Releases to Watch Today
- Euro Zone Gross Domestic Product Q4 2018 (QoQ) – Forecast 0.2%, versus 0.2% previous.
- Euro Zone Gross Domestic Product Q4 2018 (YoY) – Forecast 1.2%, versus 1.2% previous.
- ECB Interest Rate Decision – Forecast 0%, versus 0% previous.
- US Initial Jobless Claims – Forecast 225K, versus 225K previous
