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On the last day of the trading week, we will consider a fairly interesting, in my opinion, currency pair dollar/franc. The main focus of this review will be on the technical picture of the instrument and further prospects for price movement, but before that, I will highlight the fundamental factors that may affect the current price dynamics of USD/CHF.
So, at 14:45 (London time), information on business activity in the manufacturing sector and the service sector will be sent from the United States. Given the negative impact of the COVID-19 pandemic on the global economy in general and on the American economy in particular, these data are quite interesting. A little later, at 15:00 London time, we will learn about home sales on the secondary market in the United States.
Weekly
Since this currency pair is rarely considered, I will start with a weekly timeframe to complete the picture. Three circled candlesticks, given the current one, can be perceived as preparing USD/CHF for a reversal. As you can see, the bears' attempts to continue the pressure and break through the strong technical support level of 0.9050 did not bring results. It is quite expected that near the important and significant psychological level of 0.9000, the pair gained strong support, followed by a fairly significant rebound up. At the moment, trading on USD/CHF is conducted near 0.9078, that is, above the support of 0.9050. If everything ends up this way, the breakdown of this support level will be considered false, which will increase the chances of the pair moving to an upward trend. It is difficult to determine whether this will be a reversal or a course correction. However, the fact that the market does not want to decline and trade under 0.9000 is obvious.
If the pair does turn up next week, the nearest growth target will be the price zone of 0.9183-0.9196, where the broken support level and the highs of the previous week's trading are located. The longer-term goal of players to increase the rate will be the resistance of sellers at 0.9240.
The bearish scenario will get a second wind only after a true breakdown of the most important level of 0.9000 and consolidation under this mark.
Daily
On the daily chart, we see that after the growth shown in the Fed minutes, the pair declined yesterday and ended the session well below the Tenkan line of the Ichimoku indicator, at the level of 0.9072. Today, at the moment of completion of the article, the bulls on the instrument are trying to resume the upward momentum, but so far they are not very successful. The formation of today's bullish candle with the closing price above Tenkan will target the pair for another meeting with the resistance level of 0.9160. If the dollar/franc market is dominated by bears today, they will probably try to lower the rate below 0.9050 and end today and weekly trading at this level. In this scenario, it is likely to be retested for a breakdown of the most important level of 0.9000.
H1
In truth, looking at the circled candles on the weekly chart, I am more inclined to assume the subsequent growth of the pair. However, until the quote is higher than the hourly 89 exponential moving average, 50 MA and 200 EMA, it will be premature to consider the ascending scenario as the main one.
If the pair breaks through all three moving and to consolidate above 0.9100, the rollback in the pricing zone of 0.9105-0.9085, you can consider opening long positions, and confirmation of purchases will be the appearance in a dedicated area appropriate for growth patterns. If the breakdown of the designated moving averages ends without result and bearish patterns appear under the level of 0.9100 on the one-hour and four-hour timeframes, this will be a signal to open sales with the nearest target at 0.9050.
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