The US economy is still showing good results. Good Nonfarm and retail sales results for March as well as the US GDP for the first quarter, which was the forecast (the result was +3,2% against the forecast of +2%), helped the US currency to strengthen against the conservative Swiss franc. Even good data on inflation in Switzerland (the PPI was released at +0,3%; the CPI came out at +0,5%) didn’t help its national currency gain ground. The USD/CHF pair has been rising for the whole April. The question is how soon there will be a correction? Here are some possible reasons why we think you have to be ready to short the US dollar.
We have already analyzed this currency. Unfortunately, our forecast was wrong. We had expected the US dollar to bounce back from 1,0100, but it didn’t. The pair reached the next level at 1,0200. BUT on 1D TF the pair broke the first trend line, which is heading up. The pair is moving towards its shorter 9 EMA.
The MACD line started reversing. It might soon break the signal line down. We are waiting until the pair breaks the Fibo level 23,6% down (1,01561). In this case, we expect the pair to reach the next support line at 1,01061 and then move to 1,00657.
Results: it is possible to open short positions after a downward breakout of 1,01561.
Fundamentally, the most important news of this week (Nonfarm payrolls) is to be released on Friday. Economists expect that the number of workers increased by 181K in April. If the result is lower than the forecast, the US dollar can rocket. Otherwise the correction is likely to continue.