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The US dollar was seen correcting lower against the Swiss franc, but it still remains elevated and above the gap close level. We need to see whether the USDCHF pair can break down and close the opening week gap. The pair is currently testing an important area, and if it clears it, then the pair might head lower and correct further. There are a couple of releases lined up in the Euro area and the US, which might affect the USDCHF pair in the near term. The US ISM Non-Manufacturing Index will be released by the Institute for Supply Management (ISM) later during the NY session, which might impact the US dollar moving forward.

There is a bullish trend line formed on the hourly chart of the USDCHF pair, which the pair is currently testing. There is an important aspect as well because the 38.2% fib retracement level of the last leg from the 0.9928 low to 1.0115 high is also around the stated trend line. If the US dollar sellers manage to break the highlighted support area, then the pair might head lower in the near term may be towards the 50% fib level. However, the most important support is around the 100 hour moving average, which is sitting around the 76.4% fib level. The hourly RSI also looks set for a break lower to ignite losses in USDCHF.

If the USDCHF pair fails to break lower, then there is a possibility that it might move back higher towards the recent high or may be towards a new high.

Overall, one might consider selling with a break below the highlighted trend line and support area.

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Posted By IKOFX Technical Team: Online Forex Broker
Website – http://ikofx.com