On the daily chart below for USDCHF , we can see that the price bounced from the 0.8858 support and rallied towards the 0.9006 resistance. That was a strong zone as we had the 0.90 handle, the red long period moving average and the 50% Fibonacci retracement level.
The buyers needed a strong catalyst to break through but instead got a miss in US Job Openings which caused a selloff as sellers piled in expecting a weaker labour market going forward. The latest probe below the 0.8858 support was caused by yesterday’s FOMC policy decision in which the Fed hinted at a possible pause if the disinflationary trend continues as expected.
USDCHF technical analysis
On the 4 hour chart below, we can see that the last rally towards the 0.90 handle broke above a very strong trendline that acted as resistance for a long time. After the breakout it seemed like the rally could extend all the way up to the next major trendline near the 0.91 handle, but instead we got a selloff soon after. That just shows how important it is to also follow the fundamentals to get a clearer picture of what’s going on in the markets and to manage better your risk.
On the 1 hour chart below, we can see that the price is currently pulling back, probably because the sellers want to see first the US Jobless Claims and the NFP reports before really going for it. In fact, the Fed can still hike in the future if the data picks up again and inflationary pressures rise. We may see the price pulling back to one of the Fibonacci retracement levels with the 50% as the most likely one given the confluence with the 0.89 handle and a swing level. The data today will also be important because we should see a rally in case of a big beat in Jobless Claims and a selloff in case of a big miss.
