USD/CHF Correction is Limited, Holds First Support

USD/CHF came under selling pressure in yesterday’s trading, but found support in the vicinity of the former rally high established in March. The pair rebounded from that level and is carrying through on the upside today, currently trading at 1.0159, up 0.30% over Monday’s North American close.

Given the ability to hold near term support and rebound, the current target for the pair is at the high established in last week’s trading at 1.01917.

Should USD/CHF break out to new highs, the next target is at the high established in late February at 1.02564. Given the ongoing bullish outlook for the dollar, an eventual move to this resistance is expected. And, not far above this level is key resistance at the November 2015 top at 1.0330. A breakout above this level would bolster the long term outlook for USD/CHF.

On the downside, first support is now at the reinforced level defined by the March 9 spike high at 1.00925. Yesterday’s low, by comparison, was at the 1.00796. This zone now represents support on another near term pullback. Holding this area would keep the pair well-positioned to resume the advance from the November low over the near term.

Recent strong economic data has boosted the potential for an interest rate increase at the December FOMC meeting. At present, fed fund futures are pricing in a 98.2% probability of a rate increase at the December meeting, up from 93.5% on Friday. The dollar is currently trading at 101.45, up 0.3%.

In today’s session, the second estimate of US Q3 GDP will be released. Economists expect the figure to be revised up to 3.0% from the first reading of 2.9%. Also today in the US, November consumer confidence is on the calendar. This month, expectations are for a reading of 100, up from 98.6 in October.

USD/CHF Daily Chart

USDCHF_112916

EconomicCalendar.com provides the latest economic news and financial events that move the market.

About the author

Tracy Morganthall, CMT

Tracy L. Morganthall, CMT, has been a Technical Market Analyst for more than 20 years. She has experience analyzing and producing reports on equities, both domestic and international markets, as well as Forex and commodities. She attended Trenton State College in Trenton, New Jersey, earning a Bachelor's in Finance.

Indices

NamePrice($)CommentChange($)Change %
S&P 5002,215+2.29+0.10%
NASDAQ5,331-2.24-0.04%
NYSE10,995+24.68+0.23%
FTSE 1006,891.24+111.40+1.64%
DAX10,977.18+201.86+1.87%
CAC 404,685.78+53.84+1.16%
EURONEXT 100897.64+6.48+0.73%
Nikkei 22518,496.69+136.15+0.74%
HANG SENG INDEX22,800.92+125.77+0.55%

Commodities

NamePrice($)Change($)Change %Comment
Light Sweet Crude Oil Futures,D47.48-0.01-0.02%
Gold Dec 161,176.10+8.50+0.73%
Silver Dec 1617.10+0.36+2.15%
Copper Dec 162.62-0.05-1.82%