Hello, dear traders!
Since there were no significant changes in the main currency pair euro-dollar over the past day, let's turn our attention to the other main pair - the USD/CHF.
First, a little bit about statistical data and the most important events that can affect the price dynamics of this instrument. Today, at 08:00 (London time), a report on the Swiss trade balance was released, which was worse than the data published a month ago. If the country's trade balance was at 2.2 in December, today's reports were at 2.0. As for the US, yesterday, it became known that sales of new buildings unexpectedly decreased from 0.730 to 0.694.
Frankly, negative data on the Swiss trade balance did not have a significant negative reaction to the Swiss franc exchange rate. This currency is mainly associated as a protective asset and is not strongly predisposed to react to its reports. But the dollar-franc pair reacts strongly enough to important data from the United States of America, and the focus will be on the Fed's decision on rates, the accompanying statement of the Fed's Open Market Committee, and, of course, the press conference of Fed Chairman Jerome Powell, during which market participants will try to understand the Fed's further steps regarding the monetary policy of this independent federal agency.
Now it's time to move on to the technical analysis of USD/CHF, and let's start with the weekly chart.
Weekly
As you can see, after the formation of a candle the week before last with a long lower shadow, it was just right to expect a further strengthening of the rate, which happened last week. However, the pair is declining at the current five-day trading session. Given the upcoming important events, primarily related to the Fed, the price dynamics of USD/CHF may undergo significant changes.
At the time of writing, the dollar-franc pair is under selling pressure, although not yet under very significant pressure. Let's look at smaller timeframes in the hope of finding interesting and technically sound points for entering the market.
Daily
As you can see, on the daily chart, the pair is trading between the Tenkan and Kijun lines of the Ichimoku indicator, which provide support and resistance to the price, respectively. It is reasonable to assume that the breakdown of the Tenkan and consolidation under this line will affect the further downward prospects of the pair. In this case, the nearest target will be the support of 0.9611. If this level is broken and the quote is fixed below the important mark of 0.9600, the bearish scenario for this instrument will become even more obvious.
In the event of a breakdown of the Kijun line, which is now located at 0.9721, we should expect growth in the area of 0.9760, where the technical level is strong in itself, as well as the maximum values of trading on January 10 this year. These are the immediate prospects of the pair, which are viewed on the daily chart.
H4
On the 4-hour timeframe, the dollar-franc is trading in the range of 0.9728-0.9660. I assume that an exit from this range may indicate a further course direction, most likely a short-term one.
Please also note that trades are conducted near 50 simple and 89 exponential moving averages. Above, at 0.9743, the 200 exponential moving average is located. I do not rule out a false breakout up, where exactly 200 EMA will stop the rise and return the pack to the range of 0.9728-0.9660, further exit from which may occur already in the south direction.
Judging by the technical picture that is observed at the 4-hour chart, you can try to plan sales of USD/CHF from the strong resistance zone of 0.9730-0.9760, where there are two horizontal resistance levels and 200 exponents.
H1
More aggressive and risky sales can be considered from the price zone of 0.9700-0.9710 or after the breakdown of the hourly green support line, anchoring under it, and the subsequent rollback with attempts to return above this support line.
For purchases of USD/CHF, I do not see good signals and adequate ideas at the moment, so I suggest that we wait until we open long positions on the dollar-franc.
Good luck with trading!
