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The US dollar was seen losing lust during the past couple of days. There are some important signs emerging, which suggests that the US dollar might be setting up for a correction. The USDCHF pair is one of the examples, as the pair broke a crucial support area on the higher timeframe calling for more downsides in the near term. There is an important release lined up today in the US, as the Consumer Price Index will be released by the US Bureau of Labor Statistics. The market’s expectation is of a decrease by 0.1% in February 2015, compared to the last month. We need to see if there is a decline posted or not. Any major decrease might ignite losses in the US dollar.
There was a critical bullish trend line formed on the daily chart of the USDCHF pair, which was breached by the US dollar sellers recently. Furthermore, there were some bearish candles formed on the daily chart, which suggests that the pair might be heading lower in the near term. Currently, the pair is trading around the 23.6% fib retracement level of the last leg from the 0.8300 low to 1.011 high. However, the most important point is that the 100-day simple moving average is sitting just below the current price. So, let us see how buyers react if the pair tests the same.
If the USDCHF pair moves higher from the current levels, then a retest of the broken trend line is possible in the near term.
Overall, one might consider selling rallies in the USDCHF pair as long as it stays below the broken trend line.
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Posted By IKOFX Technical Team: Online Forex Broker
Website – http://ikofx.com
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