Intraday Market Analysis: Dollar Swiss Projection in the Forex Market

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USDCHF Intraday Strategy

We have been monitoring USDCHF gains since Tuesday’s session. The gains were initially triggered by remarks from the chairman of the Swiss National Bank (SNB) that threated (like Mario Draghi) lower interest rates and that the Swiss Franc (CHF) is still overvalued.

USDCHF 4hr Chart

Please click on the chart to enlarge:

USDCHF 4hr Chart 04//11/15

USDCHF 4hr Chart 04//11/15

What we have is mutated form of top Head-And-Shoulders (H&S) where the upper resistance (in black) is being tested by the market at the time of this writing. If the resistance holds as the 4hr session has yet to end weakness may be seen towards the 21 Moving Average (MA, in pink) as we noted the MA was able to sustain the gains after being tested.

A firm break below the 21MA may signal further weakness towards the neckline (lower black line), which seems to be natural target for USDCHF. In a scenario where Dollar Swiss is able to break below the neckline the weakness may intensify and target 0.9790, We have to highlight that following such breakouts the price tends to re-test the breached support (neckline) before a resumptions of the downtrend is noted.

As this is the 4hr chart we find it difficult to believe the weakness we are projecting will be triggered by the US Non-Farm Payrolls (NFP) that are scheduled for release on Friday. The most likely fundamental trigger aside a healthy retracement is the US unemployment claims that are due on Thursday.

Please note that if USDCHF closes at the 4hr close with a large upper shadow the price may attempt to re-test the resistance. It is not a guaranteed scenario but the market has the tendency to do so.

04/11/15 UPDATE: USDCHF is retracing off the resistance after it was successfully tested by the market at the 4hr close.

Please click on the chart to enlarge:

USDCHF 4hr Chart 04/11/15

USDCHF 4hr Chart 04/11/15