Fundamental Analysis of USD/CHF for September 20, 2018
USD/CHF has been quite bearish but volatile with the momentum recently after breaking below 0.9700 area with a daily close. USD has been dominated by almost all majors recently, whereas CHF has been the quite impulsive for a few weeks.
Today SNB Libor Rate report was published with an unchanged value of -0.75% and Trade Balance report was published with a decrease to 2.13B from the previous figure of 2.21B which was expected to increase to 2.41B. Despite worse-than-expected economic reports, CHF managed to maintain the momentum which is quite remarkable.
On the USD side, today USD Philly Fed Manufacturing Index report was published with an increase to 22.9 from the previous figure of 11.9 which was expected to be at 17.5 and Unemployment Claims had a positive result decreasing to 201k from the previous figure of 204k which was expected to increase to 210k but CB Leading Index was decreased to 0.4% from the previous value of 0.7% which was expected to be at 0.5%. Additionally, Existing Home Sales report was also published unchanged at 5.34M which was expected to increase to 5.36M.
As of the current scenario, USD having mixed economic reports today is still being dominated by CHF in the process which does indicate the weakness of USD at the current market situation. Though CHF may show some weakness in the coming days as result of recent worse economic reports, but it still is quite impressive with the momentum maintained so far while USD is struggling.
Now let us look at the technical view. The price has been quite volatile recently whereas today the price has engulfed the previous bullish price action with a single daily candle which does indicate further bearish momentum in the pair with target towards 0.9550 support area. Meanwhile, the price has formed Bullish Divergence in the process which might lead to certain bullish pressure after the price retests the 0.9550 support area with a daily close in the coming days.
RESISTANCE: 0.9700, 0.9850