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  • The USD/CHF pair remains under massive pressure despite a temporary rebound.
  • A new lower low could activate more declines.
  • The median line (ML) of the descending pitchfork could be used as a potential downside target.

Our USD/CHF forecast sees the pair dropping aggressively in the short term as the Dollar Index has plunged.

We have a strong positive correlation between DXY and the USD/CHF pair. A deeper drop registered by the DXY should announce to forex day traders more declines in USD/CHF.

Technically, the price has ignored potential growth and now is almost to confirm a larger corrective phase. The bias is bearish, so the pair could extend its sell-off anytime. Temporary rebounds could only help us to catch fresh downside movements. 

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The Swiss Franc took a hit from the Switzerland Trade Balance indicator which was reported at 5.05B far below 6.23B estimate and under 5.13B in the previous reporting period. Still, the pair could drop as the US data has come in worse than expected.

The Building Permits dropped unexpectedly from 1.72M to 1.59M, far below the 1.67M forecast, while the Housing Starts dropped from 1.58M to 1.56M, even if the specialists expected a potential growth to 1.61M. Tomorrow, we don’t have high-impact events from Switzerland or from the US. Though, the UK and the Canadian inflation data could have an impact on the Dollar Index.

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USD/CHF Forecast: Price Technical Analysis – Key Support Level

usd/chf forecast

The USD/CHF pair found support again around the 50% retracement level, below 0.9194 former low. After its current massive drop, we cannot exclude a temporary rebound. This scenario may take shape if the Dollar Index will recover a little after its sell-off.

As you can see on the H4 chart, the USD/CHF pair is trapped within the descending pitchfork’s body. So, as long as it stays under the descending pitchfork’s upper median line (UML), the price could resume its downward movement. 

A new lower low, a bearish closure below 0.9194, a valid breakdown through the former low may signal more declines. The median line (ML) stands as a dynamic support, as a potential downside target. Also, a temporary rebound towards 0.9219 could bring new short opportunities. 

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