On Thursday, the US dollar declined against the majority of its counterparts, and the Swiss franc managed to step away from its local lows, hit earlier on Tuesday.
The American currency was under pressure from recent statements, made by the Federal Reserve officials. Thus, William Dudley, the New York Fed president, noted that inflation is still too low and a fast growth of the US dollar may negatively affect pace of economic growth.
At the same time, Janet Yellen, the Fed Chair, gave no assessment of economic outlook and did not comment on prospects of monetary policy.
Support and resistance
According to Bollinger Bands indicator on the daily chart, an upward dynamics in the pair is getting less strong. The price range is narrowing gradually down. MACD is declining and keeping a weak sell signal. Stochastic is declining as well.
Bollinger Bands indicator recommends closing some long positions and considering the possibility of a short-term decline in the pair. MACD and Stochastic recommend short positions.
Support levels: 1.0000, 0.9956, 0.9930, 0.9900, 0.9862, 0.9822, 0.9800.
Resistance levels: 1.0050, 1.0075 (6 November high), 1.0100, 1.0128, 1.0167.
Long positions can be opened after the breakout and consolidation above the level of 1.0070 (with appropriate indicator signals) with targets at 1.0140, 1.0200 and stop-loss at 1.0050. Validity – 1-3 days.
A likelier scenario is a downward correction and the consolidation below the level of 1.0000 with targets at 0.9930, 0.9900 and stop-loss at 1.0030. Validity – 1-3 days.