Good day forex poeple! Here’s an update on the USDCHF pair that I last posted back in the 21st of May. As you can see from pair’s daily canvas, the pair broke out from an inverted head and shoulders pattern and has since risen. After hitting a high of 1.1731 on June 1, it has weakened down to 1.1400. Presently, the pair is trading just below 1.1500 and so it seems that it is already losing its upward momentum since it has been unable to mark some new highs for the past week. However, with the stpchstics now in the oversold territory, the USD could once more pick itself up to trump the Swiss franc. In case the pair falls, its next level of support would be at 1.1250. But if it does not, it could revisit its yearly high around 1.1700 or even aim for 1.2000 and 1.2200. Based on the Elliot Wave Theory, wave 5 of the could already be in the making. Here, wave 3 is noticeably the longest one while wave 4 is represented by the pair’s consolidation for the past 2 weeks.
The US dollar’s rise versus the Swissy was halted this week due to some profit taking actions and a couple of upbeat economic events in China and the US. The other day, China reported a 50% year-over-year jump in exports which indicate that the global trade is already improving. Back stateside, the preliminary Consumer Confidence survey from University of Michigan exceeded the 74.5 expectations with a two-year high of 75.5 which also lifted the higher yielding assets including somehow.
Still, such events do not hide the fact the Greece and several other countries in Europe are still facing a huge debt crisis which could implode anytime if any one of them defaults on their upcoming dues. Aside from that, the expected slowdown in Switzerland’s month-over-month PPI (from 0.6% to 0.0%), which will be on deck on Monday, could further weaken the CHF at least in the short term. Moreover, a decision by the Swiss National Bank to hold its interest rate unchanged at 0.25% would naturally be bearish for the currency. By the way, the SNB’s Libor rate decision will be held on Thursday (June 17).