USDCHF attempts a rebound

The long term bearish trend remains, but for how long?

Charts (2)

The US Dollar was bullish against most of its major pairs on Tuesday with the exception of the NZD and GBP. On the US economic data front, Markit's US Manufacturing Purchasing Managers' Index declined to 53.1 on month in the August final reading (53.6 expected), from 53.6 in the August preliminary reading. Construction Spending rose 0.1% on month in July (1.0% expected), from a revised -0.5% in June. 

On Wednesday, the Mortgage Bankers Association's Mortgage Applications data for the week ending August 28th is expected. Automatic Data Processing's Employment Change for August is expected to spike to 1,000K on month, from 167K in July. Factory Orders for July are expected to rise 6.1% on month, compared to +6.2% in June. Durable Goods Orders for the July final reading are expected to remain at 11.2% on month, in line with the July preliminary reading. Finally, the Federal Reserve's Beige Book is expected to be released.                     

The Euro was bearish against most of its major pairs with the exception of the CHF. In Europe, German Government has revised its 2020 GDP forecast to -5.8%, vs -6.3% previously. It also revised its 2021 GDP forecast to +4.4%, vs +5.2%. Research firm Markit has published final readings of August Manufacturing PMI for the Eurozone at 51.7 (as expected), for Germany at 52.2 (vs 53.0 expected), for France at 49.8 (vs 49.0 expected) and for the U.K. at 55.2 (vs 55.3 expected). The European Commission has posted August CPI at -0.2% (vs +0.2% on year expected) and July jobless rate at 7.9% (vs 8.0% expected). The German Federal Statistical Office has reported August jobless rate at 6.4%, as expected. The Bank of England has released the number of mortgage approvals for July at 66,300 (vs 55,500 expected).

The Australian dollar was bearish against most of its major pairs with the exception of the CAD, CHF and EUR. 

The FX pair with the largest move on Tuesday was the USD/CHF which jumped 58 pips to 0.9095 the day's range was 0.8999 - 0.9101. Looking at the chart, the longer term trend remains bearish. Today's action has helped identify a key support threshold at the $0.899 level. A break above key resistance at 0.9185 will have to be confirmed in order to play a rebound with a goal of breaking above the 50-day moving average. A new short signal would be confirmed with a break of 0.899 support.

Source: GAIN Capital, TradingView

Happy Trading

Build your confidence risk free

More from Forex

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.