Amid current turbulence on the world financial markets the USD remains the safe-haven asset and continues growing against its major competitors, despite very cautious statements by the Fed regarding future interest rate hike.
After a modest fall during the Asian session, the pair kept growing. Its growth is also supported by the Swiss NB attempts to avoid excessive strengthening of the Frank and negative interest rates in Switzerland.
In the absence of news from Switzerland until the end of the week, markets are waiting for releases from the US. Initial Jobless Claims data for the previous week is due today at 3:30 pm (GMT +3) (275 K forecasted, the previous figure was 281 K). On Friday, Fed’s Chair Janet Yellen speech is due at 7 pm (GMT +3).
Support and resistance
Last week, the USD/CHF pair broke out the resistance level at 0.9340 (EMA200 and EMA144 on the daily chart) and is now heading toward May highs at 0.9550. Should the trend continue, the next targets are 0.9720 and 1.0100. Otherwise, the pair returns into a 0.9500-0.9100 range.
The indicators on the 4-hour and daily charts give buy signals.
Support levels: 0.9150, 0.9200, 0.9245, 0.9340, 0.9430.
Resistance levels: 0.9550, 0.9720.
Long positons are preferred.
Ideally, long positions can be opened from 0.9340, 0.9385, 0.9430, 0.9460 (with the appropriate indicators signals on the 4-hour and daily charts) with targets at 0.9500, 0.9550, 0.9720 and stop-loss at 0.9380. Recommendation length – until the end of the week.
Short positions can be opened after the breakdown of the level of 0.9340 with targets at 0.9245, 0.9150, 0.9100.