USD/CHF: Consolidation Remains in Place

Despite yesterday’s breakout to a new intraday high, the subsequent pullback leaves USD/CHF locked in a consolidation phase. On the upside, new resistance has been established just above the 1.0200 level, while support is in the vicinity of the former rally high established in March at 1.00925. At present, the pair is trading at 1.0126 down 0.43% from yesterday’s North American close.

The bias in USD/CHF is to the upside and should the pair 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 improve the long term outlook for USD/CHF.

On the downside, first support at the March 9 spike high at 1.00925 was reinforced by Monday’s test and subsequent bounce. Monday’s low, by comparison, was at the 1.00796. Holding this area would keep the pair well-positioned to resume the advance from the November low over the near term.

In today’ news, the calendar-adjusted Swiss retail sales data declined 0.5% in the year to October compared with a revised 2.1% decline the previous month, which was originally reported as a decline of 2.3%. The annual decline was the slowest for seven months and also stronger than market expectations of a 2.0% fall.

Later today in the US, initial jobless claims are on the calendar, as is construction spending and the ISM manufacturing survey. October construction spending is projected to come in showing an increase of 0.6% following a decline of -0.4% in September. Regarding the ISM Index, economists expected the figure to rise slightly to 52.1 from 51.9 in October.

The key report for the week, however, is nonfarm payrolls for November on Friday. This figure will be particularly important given the expectations for a rate hike in December. Consensus estimate is for an increase of 180K jobs. The strong ADP report released yesterday set a positive tone for the BLS report on Friday.

USD/CHF Daily Chart


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.