Since the beginning of this week, the USD/CHF pair is in correction after it significantly grew last week. The pair managed to break out a psychologically important level of 1.0000 that was last overcome in the middle of March.
Strengthening in the USD was the result of unexpectedly strong NFPR data for October from the US that substantially increased a possibility of an interest rate hike in the US before the end of the year.
This week attention needs to be paid to data on the Unemployment Rate for October in Switzerland. The figure is expected to remain at the previous 3.2%.
Support and resistance
Bollinger Bands on the daily chart is growing, while the price range is narrowing from the top indicating a possibility of a downward correction. MACD is also growing and giving a weak buy signal. Stochastic has reached the overbought zone and turned horizontally.
The indicators recommend waiting for clearer trading signals.
Support levels: 1.0000 (psychologically important level), 0.9956, 0.9930, 0.9900, 0.9862, 0.9822 (28 October lows), 0.9800, 0.9774, 0.9717.
Resistance levels: 1.0050 (local high), 1.0075 (6 November high), 1.0100, 1.0128 (12 March high), 1.0167.
Long positions can be opened after the breakout of the level of 1.0060 (with the appropriate indicators signals) with targets at 1.0160, 1.0200 and stop-loss at 1.0030. Validity – 1-3 days.
Short positions can be opened after the breakdown of the level of 1.0000 with targets at 0.9950, 0.9900 and stop-loss at 1.0035. Validity – 2-3 days.