USD/CHF: overdue correction in the dollar pairs _09/06/2016

Trading recommendations

Buy above 0.9610. Stop-Loss 0.9570. Targets 0.9650, 0.9700, 0.9780

Sell ​​Stop 0.9570. Stop-Loss 0.9610. Targets 0.9500, 0.9445, 0.9400, 0.9200


Technical analysis

The pair came close to strong support levels 0.9580 (EMA50 on the monthly chart, EMA200, EMA144 on the weekly chart), 0.9520 (Fibonacci correction level of 0% or lower levels of the last wave of the global decline in December 2015 and at the level of 1.0300).

A mark of 0.9600 as the bottom line goes wide of the rising channel on the daily chart.

Since early June the pair USD / CHF lost more than 340 points, or 3.5%, fully offset by growth in the previous month. Dynamics of decline was pronounced against the background of the impact of fundamental factors.

Price can still drop down to the level of 0.9520, but the decline may be short-lived and need to be careful when approaching this level at the opening of short positions. On the 4-hour and daily charts Stochastic since the beginning of this week is in the oversold zone, histogram OsMA on the 4-hour chart - close to the zero line, indicating that the overdue upward correction.

It is very likely to rebound from the level 0.9580. The correction in the dollar has already begun with the opening of today's European session. Another driver of growth can serve as a publication today in the 12:30 (GMT) data on initial applications for unemployment last week. If data will be significantly better than forecast (270 000 applications), investors can come to the conclusion that the disappointing data on the US labor market in May, released on Friday, was only a temporary phenomenon, and the US dollar could dramatically strengthen the foreign exchange market, including the pair USD / CHF. Possible increase in the levels of 0.9705 (Fibonacci level of 23.6%), 0.9780 (EMA144, EMA200 on the daily chart), 0.9820 (38.2% Fibonacci level).

In the case of the breakdown of the resistance level of 0.9820 will continue upward correction to levels of 0.9910, 1.0000 (Fibonacci level of 61.8%) and above.

0.9500 support level breakthrough opens the way to a deeper reduction in the levels of 0.9445, 0.9160 (May and June 2015 lows).

Support levels: 0.9580, 0.9520, 0.9500, 0.9445

Resistance levels: 0.9600, 0.9705, 0.9780, 0.9820


Overview and Dynamics

The main intrigue of the month - a referendum on Britain's membership in the EU - leads to an increase in demand for safe-haven assets such as gold, yen. Frank also, despite the fact that his role as a safe-haven currency has weakened in recent years, is in high demand on the background of the upcoming referendum in the UK and the general weakening of the US dollar in the market.

According to the data published yesterday, the consumer price index (the CPI) in Switzerland in May increased by 0.1% compared to April (forecast was + 0.2%, in April, the growth was + 0.3%). Compared with the same period last year, consumer prices fell 0.4% in May. It is likely that a long period of deflation in the country is still far from complete. However, the pair USD / CHF remains under pressure against the background of the general weakening of the US dollar in the currency market. After disappointing data NFP May in the United States, published last Friday, investors have already ruled out raising interest rates in June and revise the likelihood the Fed tightening policy in July. Investors still consider it unlikely the Fed raising interest rates in the next few months. It is very likely that the Fed could do to refrain from raising interest rates in 2016. The US dollar on Wednesday fell to its lowest level in five weeks. the WSJ dollar index, which tracks the US dollar's value against a basket of 16 currencies, recently fell 0.5%, to 85.57, the lowest level since May 3.

If the current growth of the franc will be short-lived, the SNB may have recourse to intervention in the foreign exchange market to stabilize the franc.

If the flow of capital into Switzerland continue, the country's central bank may have to lower the rate on deposits with the current level of 0.75% for at least another 50 basis points.

In any case, near the level of 0.9500 is necessary to exercise caution when opening orders, especially to sell the pair.