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USDCHF finds a floor at 9700

Market Analysis

USDCHF, Daily                 

There appears to be some consolidation being to show in the anti-greenback sentiment. The first signs maybe appearing in one of the most violent of movers. The USDCHF peaked at 1.0098 on May 11 and sold off for eight consecutive trading days punching below 0.9700 to a low of 0.9691 (May 22) which represents a fall of over 4%. Although it may be too early to suggest a USD recovery, a stall in the fall is apparent.  A couple of factors are coming together; odds for a June Fed rate hike have improved over the past week, and are largely priced in, in addition, U.S. political handwringing has faded some, which may allow the dollar to regains some ground and finally the Trump tour seems to be going to plan and the gaffe’s many predicted have not occurred. (but its only Wednesday).

USDCHF– The long legged doji candle on Monday and the relief candle yesterday (May 22) was sufficient to prompt a LONG position on last nights close at 0.9760, target 1 is the 23.6 Fibonacci retracement level and 14 period DATR at 0.9842 with target 2 around the 20 day moving average and the 38.2 Fibonacci level at 0.9925.

The RSI is moving from over sold and remains weak at 35 but shows signs of recovery, the Parabolic SAR remains negative.  A breach and break of the fractal low at 0.9796 would negate this retrace move.

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Stuart Cowell

Senior Market Analyst


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