Last week’s test of the support at 0.9440 had to trigger a counter action of bulls on the USDCHF, and it happened, although Wednesday’s weakening of the dollar could destroy bulls’ plan.
The weakness of the dollar almost to all currencies was observed after evening FOMC. Despite the fact that the decision was in line with investors’ expectations, dollar lost value, best seen on EURUSD, which is at its highest level since January 2015.
Consolidation on USDCHF
USDCHF has been moving in consolidation between 0.9440 support and 1.0300 resistance for two years. All previous attempts to break one or the other level ended in failure. Also this time the 0.9440 level test ended with a reflection. On midday during the Thursday session, demand was able to break the nearest resistance of 0.9550, and the next targets are at levels 0.9670, 0.9860, 0.9950, up to the upper consolidation limit of 1.0300.
The main scenario for the USDCHF is currently growth movement (as part of the consolidation), but it is impossible to exclude what is currently happening with the dollar. With a general weakening of USD supply may be able to break out of consolidation. Such an attack most likely will precede a narrow consolidation over 0.9440 level when supply will gather strength to attack key support.
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