USD/CHF Price Tumbles as Greenback Struggles amid Mixed Concerns

Source Node: 1020619
  • USD/CHF price drops as Greenback suffers on the day. 
  • Mixed data could not sustain support for the pair. 
  • Technically, double top formation continues to weigh on the pair. 

The USD/CHF price drops like a rock in the short term as the Dollar Index has also turned to the downside. Technically, the DXY has shown some overbought signs lately after reaching a resistance zone.

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Surprisingly or not, the Greenback depreciates even if the PPI and the Core PPI have increased more than expected in July. Also, the unemployment claims dropped to 375K, as expected in the previous week. Unfortunately, the traders are somehow disappointed after mixed US inflation data.

Today, the Swiss Franc received a helping hand from the Switzerland PPI which has increased by 0.5% versus 0.3% expected. The US Prelim UoM Consumer Sentiment will be released later along with the Prelim UoM Inflation Expectations. Only better than expected US data could help the dollar to rebound.

USD/CHF price technical analysis: Key levels to watch

The USD/CHF pair found strong resistance at 0.9232 former high and now is located at 0.9205. The price action has printed a double top reversal pattern. This formation could be activated if the price drops below 0.9202 former low.

USD/CHF 4-hour price chart
USD/CHF 4-hour price chart

The pair has registered an amazing swing higher, so a temporary correction is natural. Failing to approach and reach the weekly R2 (0.9244) signaled exhausted buyers and signaled a potential downside movement.

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The weekly R1 (0.9194) is seen as a potential downside target, obstacle. Dropping and closing below it may signal further drop towards the downtrend line. The USD/CHF pair has signaled exhaustion also after failing to approach and reach the ascending pitchfork’s median line (ML).

Only a false breakdown through the 0.9202 and below the R1 could signal that the downside movement is over. Moving sideways above these downside obstacles may signal that USD/CHF could still resume its upwards movement.

Still, the current sell-off could be only a temporary one. USD/CHF could come down to test and retest some support levels before increasing again. We cannot exclude a potential drop towards the broken downtrend line if the rate closed under the R1.

On the 4-hour chart, the bias remains bullish despite the current sell-off. The ascending pitchfork’s median line (ML) represents a major upside obstacle.

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Source: https://www.forexcrunch.com/usd-chf-price-tumbles-as-greenback-struggles-amid-mixed-concerns/

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