Time Zone: GMT +2
Time Frame: 4 Hours (H4)
Fundamental Analysis:
The USDCHF currency pair is currently being influenced by key economic releases from both the US and Switzerland. Today, the Swiss Consumer Price Index (CPI) report will be released, providing insights into inflation trends. A higher-than-expected CPI figure may strengthen the Swiss Franc (CHF) as it could lead to a more hawkish stance from the Swiss National Bank (SNB). Conversely, a weaker CPI reading could put pressure on the CHF, allowing USDCHF to rebound. For the US Dollar (USD), several high-impact events are scheduled, including the ADP Non-Farm Employment Change, ISM Services PMI, and a speech by US President Donald Trump. The ADP employment report serves as an early indicator of the Non-Farm Payrolls (NFP) data, and strong job growth figures could support the USD. Additionally, the ISM Services PMI will gauge the strength of the US service sector, and Trump’s speech could bring unexpected volatility depending on any policy announcements. Traders should be cautious of potential price fluctuations due to these scheduled events.
Price Action:
The USD/CHF pair has reached a major support zone at 0.8890, which coincides with the 40% Fibonacci retracement level, a descending trendline support, and a previous horizontal support level. The price briefly dipped below this level but showed signs of buying interest, suggesting a possible reversal. If buyers step in, the pair could target the next Fibonacci level and descending resistance trendline at 0.8960 – 0.9000. However, if the price breaks below 0.8865, it could trigger further downside momentum, potentially leading to new lows.
Key Technical Indicators:
RSI (Relative Strength Index): The RSI is currently at 29.16, indicating oversold conditions. This suggests that the selling pressure might be weakening, and a potential reversal could be near. However, a confirmation through price action is needed before entering long positions.
MACD (Moving Average Convergence Divergence): The MACD histogram is negative at -0.002211, with the MACD line below the signal line, indicating bearish momentum. However, the decreasing bearish momentum suggests that selling pressure is slowing down. A bullish crossover of the MACD line above the signal line would strengthen the case for a reversal.
Stochastic Oscillator: The Stochastic (5,3,3) is at 27.11, approaching oversold levels. This suggests that the downward momentum is fading, and a bullish crossover in the oscillator would be a strong indication of an upward correction. Traders should watch for a crossover above the 20 level for confirmation.
Support and Resistance:
Support: Immediate support is located at 0.8890, which aligns with the 40% Fibonacci retracement level, descending trendline support, and previous horizontal support. A break below this level could open the door for further downside toward 0.8865.
Resistance: The nearest resistance level is at 0.8960, which coincides with the 23.6% Fibonacci retracement level and a descending resistance trendline. If bullish momentum continues, the next major resistance lies at 0.9000, which is a key psychological level and a trendline resistance zone.
Conclusion and Consideration:
The USD-CHF pair on the H4 timeframe is currently testing a strong support zone at 0.8890, with multiple technical confluences suggesting a potential bullish reversal. RSI and Stochastic indicate oversold conditions, while MACD shows weakening bearish momentum, which supports the possibility of an upward correction. If the price holds above 0.8890, traders can look for a rebound toward 0.8960 and 0.9000 as potential resistance levels. However, a break below 0.8865 could indicate further downside continuation. With high-impact economic events such as Swiss CPI, US ADP employment data, and ISM Services PMI, traders should expect increased volatility. Trump’s speech could also introduce unexpected market movements, making it crucial to manage risk appropriately. Waiting for confirmation through price action signals before entering trades is advisable.
Disclaimer: The analysis provided for USD/CHF is for informational purposes only and does not constitute investment advice. Traders are encouraged to perform their own analysis and research before making any trading decisions on USDCHF. Market conditions can change quickly, so staying informed with the latest data is essential.
