The US dollar is struggling to extend its advance above the key resistance area.
Will the pair continue its downward trend that has been ongoing for months?
Or will this week’s events force the dollar higher?
USD/CHF currency pair over 4 hours Chart by TradingView
As you can see, the USD/CHF pair found support at the psychological level of .8400 and is currently near a potential resistance area.
We are looking at the R1 pivot point line (.8519), which is not far from the 100-period simple moving average and trendline resistance that has been in place since early July.
Are the dollar bulls done pushing it higher?
The US releases inflation data for August this week, which could help traders determine how aggressive the Federal Open Market Committee will be when it cuts interest rates next week.
The Swiss franc – a popular safe haven and counterpart to the US dollar – could attract bullish demand if market themes turn against the US dollar this week.
Remember that directional biases and volatility in market prices are usually driven by fundamental factors. If you haven’t done your homework on the USD and CHF yet, it’s time to take a look at the economic calendar and stay up to date with the daily fundamental news!
Watch for bearish candles and sustained trading below the R1 pivot point, opening the way for USD/CHF to return to the descending triangle support at 0.8400.
If the third attempt proves to be a charm and USD/CHF breaks through 8400, the pair could head to its December lows near 8330.
However, we do not rule out further gains for the USD/CHF pair.
Sustained trading above the 100 SMA could attract USD bulls and push USD/CHF towards the descending triangle resistance, the 200 SMA, and the R2 pivot point (.8610). If bulls win this upside move and push USD/CHF above the resistance, the pair could return to higher areas of significance such as .8730 or .8800.
Good luck and happy trading with this, Forex friends!
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