I've faced difficulties in dealing with challenges, which are causing concerns regarding the possibility of shifting to the upper tier of the year. Almost a month after marking the highs around 0.9224, the USD/CHF pair has faced a decline to 0.9095, attributed to the weakness of the dollar. Investors are now proceeding with caution while awaiting the crucial US non-farm payrolls data, expected to announce 243,000 jobs for April. This data release could particularly impact the USD/CHF exchange rate. A robust jobs report could signal a strong US economy, leading to discussions about future interest rate hikes. Consequently, this could stabilize the dollar and mitigate the current downtrend of the USD/CHF pair. However, uncertainties arise due to the Federal Reserve meeting's conditions. Despite maintaining its current monetary policy, Chairman Powell recently acknowledged a slowdown in inflation progress, implying that achieving the Fed's 2% inflation target could take longer than expected. Additionally, the Fed's announcement of a slow pace in balance sheet reduction (quantitative tightening) could dampen enthusiasm for the dollar.
Technically, the USD/CHF pair has shown some signs of unexpected volatility. It has breached key resistance levels twice, including February's high (0.8884) and the 200-day exponential moving average (EMA). There is concern that this upward trend is approaching its limit after recently falling below the support around 0.8780. However, several factors could prevent a perfect reversal. The uptrend line proposed since December still holds significant strength, currently being tested around 0.8765. Furthermore, January's high at 0.8727 could provide support and alleviate downward pressure. Failure to hold these support levels could accelerate the lower downtrend. A breach below January's high could push towards the 0.8680 zone, representing a rapid move towards the 38.2% Fibonacci retracement level of the October-December downtrend. Following such a decline, angles may target the 23.6% Fibonacci level at 0.8545. Technical indicators also align with this bearish outlook. The Relative Strength Index (RSI) is poised to dip below 50, indicating a potential momentum shift. Additionally, the Moving Average Convergence Divergence (MACD) is currently trading below its signal line, providing further evidence of a possible downtrend. Though the Stochastic oscillator is in oversold territory, it's important to note this as a potential signal of continued weakness.
Technically, the USD/CHF pair has shown some signs of unexpected volatility. It has breached key resistance levels twice, including February's high (0.8884) and the 200-day exponential moving average (EMA). There is concern that this upward trend is approaching its limit after recently falling below the support around 0.8780. However, several factors could prevent a perfect reversal. The uptrend line proposed since December still holds significant strength, currently being tested around 0.8765. Furthermore, January's high at 0.8727 could provide support and alleviate downward pressure. Failure to hold these support levels could accelerate the lower downtrend. A breach below January's high could push towards the 0.8680 zone, representing a rapid move towards the 38.2% Fibonacci retracement level of the October-December downtrend. Following such a decline, angles may target the 23.6% Fibonacci level at 0.8545. Technical indicators also align with this bearish outlook. The Relative Strength Index (RSI) is poised to dip below 50, indicating a potential momentum shift. Additionally, the Moving Average Convergence Divergence (MACD) is currently trading below its signal line, providing further evidence of a possible downtrend. Though the Stochastic oscillator is in oversold territory, it's important to note this as a potential signal of continued weakness.
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