Bottom line: USDCHF long term structure remains bullish against 0.9150 mark. It has managed to carve a higher low at 0.9375 on June 11, 2020. Bulls are looking poised to resume rally above the 0.9900 mark, going forward.

Fundamental Outlook:

USDCHF has not moved much since the NFP yesterday and is almost flat around 0.9458. The exchange rate is set to gain as the US Dollar is showing signs of a reversal. Yesterday was no different as Global Indices and risk appetite gained close to +1.0%, but DXY was quick to be back above 97.00 mark.

SPX500, Dow Jones, NASDAQ and other indices have been rallying despite a steady rise in COVID-19 infections; the US alone has seen over 50K cases on Wednesday. US-China and China-India rift has been rising as well, with more sanctions being imposed.

A similar situation prevailed in January-February 2020, when COVID-19 was spreading fast in the US and other countries. Investors were all out, calling 30K-40K in the Dow Jones; we know what followed in February-March. This time it is the NASDAQ registering new highs, history might be set to repeat!

GBPJPY has again reversed from 134.70 highs yesterday. The exchange rate is trading below 134.00 mark and is set to come under further pressure and the Japanese Yen rises. The fragile risk sentiment might reverse lower, giving a distinct edge to the Japanese Yen.

Technical Analysis:

USDCHF bulls are inclined to resume rally towards 0.9900 levels and beyond, over the next few weeks to come. The currency had bounced off 0.9375 lows on June 11, 2020, which still remains intact. A break above 0.9540 would confirm that USDCHF is on its way higher.

USDCHF had earlier managed to rally between 0.9185 through 0.9900 in an impulse wave. Ideally, an impulse id followed by a corrective wave in the opposite direction. The drop from 0.9900 towards 0.9375 was corrective and it bounced a few pips below the fibonacci 0.618 retracement of the above rally.

Most probably, the next big move should be higher towards 0.9900 and prices should stay above 0.9375 ideally. Most traders might have initiated fresh long positions around 0.9400/0.9500 mark, with protective stop below 0.9375, and projected targets towards 0.9900 respectively.

Prepared by

Harsh Japee, Technical Analyst.

USDCHF Chart

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