Bottom line: USDCHF medium term outlook remains bullish against 0.9150 lows. It has tested recent lows at 0.9362 levels yesterday and bulls are looking poised to remain in control from here on. The upside targets over the next few weeks could be 0.9800 and 0.9900 respectively.

Fundamental Outlook:

USDCHF has reversed from 0.9362 levels, yesterday’s lows and is back above 0.9400 mark as we prepare to publish this update. The US Dollar gained across the board during New York Session and might continue to gain further. Pro risk currencies EURO, Aussie Dollar dropped against the US Dollar.

Global Equities reversed from their respective day’s highs including Dow Jones, SPX500, DAX and FTSE. Asian Markets are set to follow suit as risk aversion returns. Believe it or not, this might just be the beginning of a more dramatic collapse across risk assets.

COVID-19 infections have now crossed the 12 million mark with over 550,000 deaths. Mexico alone has seen over 7K infections and 730 deaths. The suspected second wave of COVID-19 infections and economic growth issues remain cause of concern for WHO and Central Banks respectively.

Technical Analysis:

USDCHF looks to be back in control of bulls as it bounces sharply from 0.9362 lows yesterday. Major support lies around 0.9150 mark with bulls poised to rally beyond 0.9800 and 0.9900 over the next few weeks.

USDCHF had earlier rallied from 0.9150 through 0.9900 as an impulse wave. A general guideline suggests an Impulse Wave is usually followed by a Corrective Wave in the opposite direction. USDCHF has produced a corrective drop (3 Waves) from 0.9900 through 0.9362 levels.

USDCHF has found support just ahead of the fibonacci 0.786 retracement of earlier rally, seen around 0.9335 levels. A bullish bounce here has got the potential to push prices through 0.9800 and 0.9900 levels, going further.

Traders might be preparing to initiate fresh long positions around 0.9400 mark with protective stop just below 0.9300 mark. The projected targets could be above 0.9900 over the next few weeks. Only a break below 0.9150 would change the above structure.

Prepared by

Harsh Japee, Technical Analyst.

USDCHF Chart

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