I see a textbook trend setup on the 4-hour time frame for USD/CHF.
Will we see another channel bounce this time?
Or is it the opposite of the cards?
USD/CHF Forex 4 Hours Chart by TradingView
ICYMI The May FOMC statement led to a significant decline in the US dollar, although interest rates were kept unchanged as expected.
As it turned out, dollar bulls seemed frustrated about the lack of hawkish rhetoric, with Fed Chair Powell stressing that their next move was still likely to be a rate cut. Furthermore, policymakers also agreed to slow the pace of reducing bond holdings from their balance sheet, which was seen as a form of easing.
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven't done your financial homework on the USD and CHF yet, it's time to check the economic calendar and stay up to date with daily fundamental news!
USD/CHF pulled back from the resistance channel upon hearing this announcement, retreating to the important mid-channel area at the 50% Fibonacci level and the first resistance level (0.9170).
Support appears to be holding so far, but a deeper correction could reach the 61.8% level closer to the 0.9150 minor psychological mark or channel support near the pivot point level (.9130).
If any of these hold as a floor, look for a sustained up move back to the swing high or channel resistance around the R2 level (.9240). After all, the 100 SMA is still above the 200 SMA, indicating that the uptrend is more likely to gain momentum than to reverse.
Just be sure to keep an eye on the Swiss CPI and retail sales release when trading this issue. good luck!
