U.S. Consumer Confidence reached a 6-year high, rising to 82.3 from an expected 78.7; while U.S. new homes sales missed the expectations coming in at 440K versus the forecast of 447K.
After promising gains during the European session, USD/CHF advance stopped at 0.8852, around the current pivot zone which extends up to 0.8868.
Technical analysis
The bullish swing from last week doesn’t necessarily mark the end of the bearish trend on USD/CHF, at least not without further confirmations. The current pivot area offered strong support in February, and it’s providing equally strong resistance now. A bearish trendline from January-February adds to the current resistance, as does the 200 simple moving average on the 4H timeframe and possibly the 31.8% Fibonacci retracement between 0.9155-0.8698. Furthermore, observing only the large swings, USD/CHF has yet to make a higher swing high in the current downtrend.
A rally above the 0.8852-0.8868 pivot area will invalidate the high-low configuration of this downtrend, increasing the chances for further USD/CHF gains towards 0.8980, with 0.8927 being a possible intermediary stop.
Failure to break above the pivot area can lead to additional choppy price action between 0.8870 and 0.8780, until this period of uncertainty passes.
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Prepared by Alexandru Z., Chief Technical Strategist at Capital Trust Markets