Daily Market Recap - USDCHF Forecast

The USDCHF was met with aggressive supply on Friday as the pair fell 0.75 percent for the day, reversing gains from the two previous sessions. The pair failed to capitalize on its bullish momentum as strong selling currents in the greenback against its major rivals JPY and EUR weighed on the USDCHF at the end of the week.

Despite the US being the leading country in terms of COVID-19 cases, the countrys economic data continues to point upwards. The US Census Bureau announced a 5.6 percent increase in the retail sales control group for June versus expectations of 3.6, indicating personal consumption is on the rise and the recent fiscal stimulus boosted consumption more than anticipated.

The US Dollar looks set to remain under pressure as long as global economic data continues to deliver upbeat results. The Dollar Index (DXY) is nearing its two-month low of 95.72, currently hovering around 96. Talks of further monetary stimulus by the US Federal Reserve will likely support riskier assets in the short run and further weigh on the greenback.

From a technical perspective, the USDCHF remains on track to push lower as momentum continues to favor the bears. The next downside target will be the 0.93622 support level and in extension, the 0.93208 marks. Buyers will likely resurface around the 0.933 marks, as the RSI may signal oversold conditions at that point.

(Chart Source: Tradingview 19.07.2020)

Traders may look to short the USDCHF at current levels to ride the bearish action into the start of next week. Pullbacks below 0.933 may be bought. However, without any further indication on the direction of the Swiss National Banks monetary policy, traders may be at the mercy of a kneejerk reaction by the central bank sending the USDCHF higher should it deem the CHF too strong.

Support and Resistance Levels:

R3 0.95080

R2 0.94686

R1 0.94219

P 0.94000

S1 0.93622

S2 0.93208

S3 0.92525

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.