Bottom line: USDCHF short term outlook remains bearish against 0.9900 levels. Bears might be preparing to resume lower towards 0.9345/0.9445 zone at least.
Fundamental Outlook:
The Non-Farm Payrolls coming out today at 08:30 AM EST and the COVID-19 effects shall remain decisive for USD outlook against its counterparts. The NFP is expected to print lower jobs, (around -100K Vs 273K) followed by an increase in the Unemployment Rate (3.8% Vs 3.5%).
This could drag the USD lower against most majors. Also the rising casualties (over 5000 now) due to COVID-19 spread in the U.S, would downplay the economic conditions going forward.
Major beneficiary could be Gold, if the NFP prints lower. We can witness a short term spike in Gold prices that could test $1640/50 levels again.
Technical Analysis:
USDCHF bears might be poised to resume lower as the single currency pair might have carved a lower high around 0.9750 levels. The drop could reach 0.9450 at least and up to 0.9340 levels, going forward.
Please note that the fibonacci 0.618 support of the previous rally between 0.9184 and 0.9900 levels is seen at 0.9450, and a bullish bounce may appear. We would re-access the situation and decide on further potential direction.
At the moment, most traders might be willing to initiate fresh short positions around 0.9750/60 levels, with protective stop just above 0.9900 and projected target towards 0.9440 and 0.9340 respectively. Please note that a continued drop below the 0.9340 levels would confirm that USDCHF is headed below 0.9185 lows, going forward.
Alternately, USDCHF might continue to rally from current levels (0.9740/45) and manage to break past 1.0027 resistance (October 03, 2019 highs). In this case, the bearish outlook would be nullified and it might be safe to buy USDCHF on dips going forward.
Prepared by
Harsh Japee, Technical Analyst.
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