FxWirePro- USDCHF Trade Idea

The pair surged sharply on board-based US dollar buying. Overall bias remains bullish as long as support 0.8780 holds. It hit a high of  0.89450 at the time of writing and is currently trading around 0.89337.

Last week, the Swiss franc (CHF) dropped sharply against the US dollar (USD) due to several reasons. Strong economic data from the US, like good job numbers and rising inflation, made investors more confident in the US economy. This led to higher demand for the dollar as people expected the Federal Reserve to raise interest rates. Normally seen as a safe option, the Swiss franc lost value as investors moved away from safe-haven currencies. The exchange rate showed CHF trading at about 1.139 against the dollar, lower than before. Additionally, the Swiss National Bank kept interest rates lower than those in the US, favoring the dollar. These factors together led to the CHF's decline against the USD.

Technical Analysis

The pair is currently trading above the 34- and above 55-EMA on the 4-hour chart.

Near-Term Resistance: Current resistance is at 0.89580. A break above this level could lead to targets at 0.9000/0.90480.The break above 0.87500 confirms that decline from 0.9225 got completed at 0.83750.

Immediate Support: The next support level is at 0.8890. If this level is broken, the pair could drop to 0.8850/0.8835/0.8800/0.8780/0.8750/0.8720/0.8700/0.8660/0.8600/0.8580, 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)

1. CCI (50): Bullish
2. Average Directional Movement Index: Neutral

Overall, the trend remains mixed

Trading Recommendation

Consider buy on dips around 0.8890, with a stop loss set at 0.8850 and aiming for a target price of 0.9000.