27.12.201911:37 Forex Analysis & Reviews: Analysis and forecast for USD/CHF as of December 27, 2019

Hello, dear colleagues!

Due to the virtually empty economic calendar, the main driver for the market can be considered the ongoing trade epic between the US and China. In recent days, there have been growing voices that the signing of the first phase of the trade agreement is not far off. Although how many similar statements have already been made, followed by almost refutations.

However, confidence in the implementation of the deal is expressed not only in the United States but also in China.

If you go to the technical picture for USD/CHF, it is frankly frustrating. In the last article on this instrument, I expressed confidence in a good signal for growth, which means purchases. However, look what happens.

Weekly

Previously shared his personal view on the dollar/franc pair, which is largely bearish. However, after the appearance of such an obvious bullish model of candlestick analysis last week, personal preferences should have been left aside and based on technical factors, which was done.

I assumed the growth of the quote and recommended buying, calling this bullish candlestick signal quite strong. But the reality is completely different. I think that not the least role in this situation was played by the 200 exponential moving average, which had a strong resistance and did not let the rate go up.

Yes, the lows of the last candle have not yet been rewritten, and only if the current trading closes below 0.9769, we can talk about breaking the bullish model of Japanese candles. However, judging by such strong bearish sentiment, which is observed on USD/CHF, a breakout of the support of 0.9769 can be expected. Until this happens, the chances of growth remain. We are waiting for the closing price of the current weekly candle, after which we can make more specific conclusions.

Daily

If on the weekly chart a strong resistance is represented by 200 EMA, then on the daily timeframe this function is performed by the Tenkan line of the Ichimoku indicator. As you can see, the Tenkan actively turns down after the price, which only emphasizes the strength of bearish sentiment.

I believe that the inability to pass the Tenkan up and led to such an accentuated decline, which is observed in USD/CHF at the time of writing this article.

Most likely, we will see repeated testing for a breakdown of the support level at 0.9769. If it succeeds and the quote is fixed below, on the rollback to the broken level, it is worth trying to open short positions. If 0.9769 stands, we can expect a pullback to the landmark level of 0.9800, where a little higher, at 0.9807, the Tenkan line passes.

In my opinion, only a true Tenkan breakout will indicate a change in sentiment for USD/CHF and open the way to strong technical levels of 0.9820, 0.9840, 0.9860 and possibly to 0.9900.

At the moment, I am more inclined to continue the downward scenario, but a more accurate assessment can be given only after the closing of weekly and daily trading.

If you offer trading ideas for USD/CHF, the best, perhaps, is to stay out of the market. First, the market itself is quite thin. Second, the completion of weekly trading and profit-taking before the weekend can provoke sharp movements in each of the parties. Decide for yourself whether to go to such a market.

Have a nice day!