Written By : ForexAbode.com || Sunday, 03 August 2014 05:57 GMT

USD/CHF Outlook - Week of August 4th, 2014

USD/CHF went as high as 0.9107 but lost momentum. Friday's weak unemployment data from the U.S. brought a fall for the currency pair to 0.9041 before the price closed for the week at 0.9058.

 

The economic news became the driver for Friday's fall but technically the 38.2% retracement of the moves from 0.9839 to 0.8699 was supposed to be a resistance. This level is at 0.9154 and just 2 pips below a previous key resistance level of mid-January. The resistance came just 47 pips below this retracement level. Please refer the charts posted below.

 

Overall the outlook for the near-term is bullish now but some more downward consolidation cannot be ruled out during the next week. On the downside we expect support above 0.9030. 0.9038 had proved to be a crucial resistance, especially because during the second attempt of recovery, USD/CHF had failed miserably just one pip below this i.e. at 0.9037. This resistance is expected to turn into support now and hence we expect support over 0.9030. If this support holds and a break over the recent 0.9107 takes place then we would expect further gains towards 0.9154/0.9156 resistance zone for the completion of the above mentioned 38.2% retracement. in case the pair breaks above this resistance then it should target 0.9240/0.9250 resistance zone.

 

However, if the resistance below 0.9156 holds and the support of 0.9030 fails then the immediate bullish outlook starts getting neutralized but even in such case we will expect a strong support in 0.9003/0.9008 support zone. A break of this support should make USD/CHF to target 0.8970 first and then possibly lower. Any failure of 0.8969 will start neutralizing the bullish outlook and any break below 0.8959 will confirm a topping to bring another fall towards 0.8856. 

 

This is not for the next week but overall, In case the resistance near the above mentioned 38.2% Fibonacci retracement level i.e. in the range of 0.9134 to 0.9156 holds and any break below 0.8699 takes palce then the downtrend should resume again. Such a break would then target 0.8568 to 0.8630 support as we had indicated in an old post of December 16, 2013 titled "Is USD/CHF heading for a nosedive". 0.8568 was a strong support during the week of October 24,2011 and this level is slightly above the 50% retracement of the gains from 0.7069 to 0.9972, which is at 0.8520. Please also check the post titled "USD/CHF 2014 Outlook – Who Is Winning As The Safe Haven Currency?" to check on all these indicated levels.

USD/CHF price-action - Various views

USD/CHF - daily chart with exponential moving averages - August 3, 2014

USD/CHF with the break of 200-day moving average resistance - August 3, 2014

USD/CHF with daily Ichimoku cloud - support ahead - August 3, 2014.

USDCHF with MACDn - August 3, 2014.

USD/CHF chart showing the break of the strong resistances - August 3, 2014

USD/CHF weekly chart with price-action channel support - August 3, 2014

USDCHF is expected to head of 38.2% retracement level - daily chart - August 3, 2014

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