Saturday, May 05, 2018

I Expect A USD/CHF Drop

When the NFP data came out on Friday the USD showed strength and moved north.

In my opinion, however, that was a temporary reaction and next week we will see a weaker dollar.

USD/CHF, despite the visibly exhausted bullish trend and the obvious need for a correction, moved north with about 40 during the news event , reaching a new high at 1.00225.

On the W1 time frame the pair is at a strong resistance and despite the minimal rally next week I expect there will be a bearish correction. In my option, the depreciation may reach 0.9570 – 0.9550.

The possibility for a correction is also confirmed by the RSI divergence on the H4 time frame, which is between four highs and is a signal for a trend reversal.