The USD/CHF has managed to rebound in the last week and has taken out an important dynamic resistance, the pair has decreased a little in the yesterday’s trading session and could test the broken resistance line. The price has reversed from the last two week when the pair has found strong support level, the USDX decline from the start of this week has pushed the price a little lower, but the price could increase further if the US dollar index will jump higher in the coming days. The USDX measures the strength of the USD compared to a basket of currencies, the index has edged higher in the last week and now is retesting the broken resistance levels, the rate is showing reversal signs, the USD will start a broader upward movement versus all its rivals if the index will climb higher in the coming weeks.
The price has broken above the sliding parallel line on Friday and now is trying to test this broken obstacle, the next upside target is at the first warning line (WL1) of the descending pitchfork, the pair could retest also the former uptrend line if the USD will have enough energy to drag the price higher. This rebound was somehow expected because the pair has lost its bearish momentum, has given reversal signs as the price has failed to retest the median line of the descending pitchfork, has failed also to reach the previous low from 0.9475 level, remains to see if the corrective phase has ended or will resume after this short rebound.
We’ll have to wait to see how the price will react when will touch the confluence zone formed at the intersection of the uptrend line with the first warning line, we could see a broader rebound only if the price will stay above the pitchfork’s body.
We could have some volatility on this pair as the US is to release high impact economic data, the Federal Reserve will publish also the Federal Funds Rate tomorrow, the FED is expected to maintain the rate on hold at least till this summer. The US will publish the Core Durable Goods Orders, which are expected to increase by 0.6% in March, could increase again after the 1.3% decrease from February, moreover the Durable Goods Orders may increase by 1.9% in March, could increase sharply compared to the 3.0% decrease from February. The CB Consumer Confidence could decrease a little from 96.2 to 95.8, could harm the USD if will drop much more.
I’ve drawn a short ascending pitchfork on the H4 chart to show you better the short rebound, the price is moving upward inside of the ascending pitchfork’s body, has reached its first target at the upper median line (uml) and then has decreased to retest the median line (ml), has closed above this minor support and now looks determined to increase again with target at the uptrend line. The outlook is bullish on the short term as long as the price is trapped inside of the ascending pitchfork’s body.