The USD/CHF continues to drop slowly as the price is in a correction phase after has taken out an important dynamic support, the price has started a broader retracement as the US dollar continues to fall after the FED rate decision. The USD buyers were disappointed by the Federal Reserve’s decision to maintain the rate on hold again in March, the FED remains cautious and could delay the rate hike, is less likely to see an increase sooner than this autumn. The US dollar index continues to trade lower, the index has reached the previous low on Friday and now is struggling to rebound on the short term.
You can see that the price is on a declining path after breaking the short term uptrend line, right now is approaching the 0.9472 horizontal support where he could find temporary support if the US dollar index will have enough power to push the greenback higher again, any drop below the static support will open the door for more declines. The retracement was expected as the price has failed to continue the upward movement, has failed to consolidate above the 1.0239 swing high. The pair continues to move somehow sideways on the medium term, the price could fall again toward the support of this extended range if the US dollar index will resume the downward movement.
The US dollar buyers weren’t strong enough to push the price higher on Friday even if the Switzerland Unemployment Rate has increased from 3.4% to 3.5%, matching expectations, the rate has reached the highest level after February 2011.
The USD/CHF has been undecided on Wednesday and Thursday, the United States Unemployment Claims have decreased to 267K in the week ended on April 1, but the USD has remained sluggish, the price continues to move down inside of the descending pitchfork, is moving down after has tested the upper median line (uml) and the broken uptrend line. The pair is heading toward the static horizontal support from the 0.9472 level, the outlook remains bearish as long as the price will trade inside of the descending pitchfork’s body, the pair is trapped between the upper median line (uml) and the median line (ml).
The price is driven only by technical factors today because we don’t have any major economic event from Switzerland or from the United States, actually we have FED Announcement Tentative, due to discuss the discount rates to be charged by the FED, remains to see if will have any impact on the USD’s movement.
The bears look somehow exhausted on the short term, the pair has decreased little in the last days and now is fighting hard to rebound and to recover, but the price needs a bullish spark to do this. The resistance could be found at the upper median line of the descending pitchfork and higher at the 0.9659 horizontal resistance (support turned into resistance). We could have a short term Falling Wedge pattern if the price stays somehow above today’s lows, but we’ll have to wait for a confirmation.