Talking Points
- US Dollar continued to gain against the Swiss Franc and has the potential to test the $0.9460 resistance area moving forwards
- Swiss ZEW Survey Expectations published by the Centre for European Economic Research came in at -0.1 in May 2015, compared to the last reading of -23.2
- USDCHF is trading around $0.9400 which, if breached, might clear the way for more upsides in the near term
Key Highlights:
Swiss ZEW Survey Expectations
FOMC Meeting Minutes
USDCHF Technical Analysis
The US Dollar continued to outperform almost every other major currency, including the Swiss Franc. There was a monster bearish trend line formed on the 4-hours chart of the USDCHF pair, which was breached by buyers recently. The most important point was that the pair managed to close above the 100 simple moving average (H4), which is a strong bullish sign.
Currently, the pair is trading around the 38.2% Fib retracement level of the last drop from the $0.9861 high to $0.9074 low. There is a probability that the pair might correct lower from the current levels. However, the 100 SMA might come into play in that situation, and could act as a barrier for the USD sellers. Any further losses might take the pair towards the broken trend line, which could provide support.
The ultimate target for buyers as of now looks like the 200 simple moving average, which is aligned perfectly with the 50% Fib level. A reaction is likely if the USDCHF pair manages to test $0.9260, as it represents a major swing area.
Swiss ZEW Survey Expectations
Earlier during the London session, the ZEW Survey Expectations, which presents business conditions, employment conditions and other elements affecting the day to day running of a business in Switzerland was published by the Centre for European Economic Research.
The outcome was very impressive, as the ZEW Indicator rose by 23.1 points to a reading of minus 0.1 points in May 2015. This should have helped the Swiss Franc, but the market sentiment was such that the USDCHF pair continued to gain pace. However, the possibility remains that a correction will develop as we move ahead.
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Article by Tom Daly, Academy of Financial Trading
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