Sell in the market. Stop-Loss 0.9710. Targets 0.9635, 0.9580, 0.9520
Buy Stop 0.9720. Stop-Loss 0.9670. Targets 0.9770, 0.9820, 0.9910, 0.9950
If published this week before Friday's labor market data US economic indicators are weak, it is likely to further decline in the pair USD / CHF down to support level 0.9580 (EMA200, EMA144 and the lower boundary of the rising channel on the weekly chart), 0.9520 (the lower bound of the range between the levels of 0.9950, 0.9520).
Otherwise near the level of 0.9635 is possible retreat from the lower channel line and the rise above the level of 0.9705.
Against the background of the general weakening of the US dollar in recent days, the pair USD / CHF over the last five trading sessions, the active reduction has broken important support levels 0.9910 (Fibonacci level 50% correction to the recent global wave decline from December 2015 and from the level of 1.0300), 0.9820 (Fibonacci level 38.2%), 0.9770 (EMA200, EMA144, EMA50 daily chart), 0.9705 (23.6% Fibonacci level). Currently the pair is close to the support level 0.9635, which passes through the lower line of the rising channel on the daily chart.
With strong data on the labor market, which will be published on Friday in 14:30 (GMT + 2), the pair USD / CHF will rise, and will return in a rising channel on the daily chart with the upper boundary, passing near the level 0.9950 (the upper limit of the range).
Indicators OsMA and Stochastic on the 4-hour and daily charts recommend short positions.
Support levels: 0.9635, 0.9580, 0.9520
Resistance levels: 0.9705, 0.9770, 0.9820, 0.9910, 0.9950, 1.0000
Overview and Dynamics
According to the data presented on Friday, US GDP increased in the 2nd quarter by 1.2% seasonally adjusted, that is much less than expected by the forecast (+ 2.6%). The average annual growth of US GDP in the current economic cycle remains the weakest since at least 1949. Weaker-than-expected US data on GDP growth in the 2nd quarter helped to reduce investors' expectations about the imminent interest rate increase in the United States. Weak GDP data, as well as the indices presented yesterday by ISM business activity in the US manufacturing sector and a gradual acceleration of inflation in the country in July, contribute to the weakening of the US dollar in the currency market. The WSJ dollar index, which reflects the value of the US dollar against a basket of 16 currencies, fell 0.05% to 86.74.
Real retail sales in Switzerland in July fell by 3.9% in annual terms. This figure, estimating the total volume of retail sales is considered an indicator of consumer confidence and reflects the state of the retail sector in the short term. Reducing index usually has a negative impact on the franc. However, the franc is rising against the US dollar.
USD / CHF pair has been declining for a fifth consecutive session. The US dollar is losing ground in the forex market.
Now, market participants turn their attention to Friday's labor market data in the US in July, to see if the US economy is strong enough that the Fed has been able in the coming months to raise interest rates. It is expected that the growth of new jobs in July in the US amounted to 175,000 and the unemployment rate remained at 4.9%. However, if they are worse than forecast, the US dollar weakened significantly in the currency market, as expectations of an early increase in US interest rates finally weaken. Seems most likely increase in US interest rates to 0.25% in December. President of the Federal Reserve Bank of New York William Dudley, in particular, spoke out yesterday in favor of maintaining caution against raising interest rates in the United States.
Despite the fact that the current interest rate on deposits in Switzerland is in negative territory, accounting for 0.75%, while the franc lost basically safe haven status of the Swiss National Bank action in the currency market, it is in demand among investors.