The pair recovered sharply after a minor sell-off. Overall bias remains bullish as long as support 0.8600 holds. It hit a high of 0.87929 at the time of writing and is currently trading around 0.87840.
The policy divergence between the US Fed and SNB supports the pair at lower levels.
Initial jobless claims fell to 216,000, down from 221,000 last week and lower than the expected number of 221,000. This indicates a small improvement in the job market since fewer people are asking for unemployment benefits. However, the preliminary Michigan Consumer Sentiment index dropped to 70.5 from 71, suggesting that people might be concerned about inflation and the economy.
Technical Analysis
The pair is currently trading above the 34- and 55-EMA on the 4-hour chart.
Near-Term Resistance: Current resistance is at 0.8800. A break above this level could lead to targets at 0.8875/0.8900/0.8925. The break above 0.87500 confirms that the decline from 0.9225 got completed at 0.83750.
Immediate Support: The next support level is at 0.8750. If this level is broken, the pair could drop to 0.8700/0.8660/0.8600/0.8580, 0.8550, 0.8525, 0.8499, 0.8440, 0.8420, 0.8390, 0.8365 (61.8% Fibonacci projection), or even 0.8340.
Indicator Analysis (4-hour chart)
- CCI (50): Bullish
- Average Directional Movement Index: Bullish
Overall, the trend remains neutral
Trading Recommendation
Consider buying on dips around 0.8750, with a stop loss set at 0.8700, and aiming for a target price of 0.8925.
