Dollar Halts Rally Against Swiss Franc As Overbought Sentiment Prevails
Aug, 10th 04:10
The US Dollar (USD) continued downside movement against the Swiss Franc (CHF) on Monday, dragging the price of USDCHF to less than 0.9850 following the Friday’s Nonfarm Payrolls. The technical bias remains bullish due to a Higher High and Higher Low in the ongoing wave on daily chart.
As of this writing, the pair is being traded around 0.9831. A hurdle may be noted near 0.9850, the psychological number ahead of 0.9860, the swing high of Friday as demonstrated in the following daily chart.
On the downside, the pair is expected to find a support around 0.9700, the psychological number ahead of 0.9674, the 76.4% fib level and then 0.9558, the 61.8% fib level. The technical bias will remain bullish as long as the 0.9524 support area is intact.
The US Bureau of Economic Analysis released the Nonfarm Payrolls report on Friday. The report showed that the U.S. gained 215,000 jobs in July, largely matching expectations, and the unemployment rate stayed pat at 5.3%. The solid employment data offers little reason to upend Federal Reserve Chairwoman Janet Yellen’s plan to lift rates, possibly at the next two-day meeting of the Federal Open Market Committee, which begins on Sept. 16. Generally speaking, an increase in the benchmark interest rate is seen as positive for the US Dollar (USD) and vice versa thus expectations about interest rate hike spurred bullish momentum in the price of USDCHF and other dollar pairs across the board.
Binary Options Trade Idea
Considering the overall technical and fundamental outlook, buying the put option of USDCHF around 0.9860 appears to be a good strategy in short to medium term if we get a bearish pin bar or bearish engulfing candle on daily chart.