Good day, dear traders!
A large-scale weakening of the US dollar, which has been occurring for several weeks, is also observed in the pair with the Swiss franc. At the same time, the results of the Fed meeting and the crushing fall in the GDP of the United States in the second quarter of this year poured oil into the fire of selling the US currency. The negative impact of the COVID-19 pandemic has harmed the world's leading economy, whose gross domestic product declined by 32.9% in April-June. Despite the fact that the indicator came out better than the consensus forecast of 34.1%, this did not save the "American" from further decline.
However, according to some economists, the situation may change in the third quarter and US GDP will grow by 15%. Given the extremely difficult situation with the coronavirus pandemic in the United States, such a dramatic change is hard to believe. Although, as they say: we'll see. If you look at today's economic calendar, we expect a large block of statistics from the United States, which would highlight data on personal income and spending of Americans. I am not sure that even with favorable figures, the situation will change significantly. The US dollar is under strong selling pressure, and events that could change this situation have already taken place and only increased pressure on the world's leading reserve currency.
Weekly
This week, the pair shows a fairly strong decline, during which the most important support level of 0.9183 breaks through. If monthly, weekly and daily trades close below this level, the path to the iconic psychological level of 0.9000 will be opened. It is quite possible that this will not happen immediately, and before testing 0.9000, we will still see a course correction. If so, the expected correction can be used to generate sales transactions. However, in order to draw such conclusions and make appropriate decisions, it is necessary to wait for the results of the closing of July and the current five-day trading period.
Daily
On the daily scale, the pair shows a confident and stable decline, which implies some adjustment. Only to understand exactly when it will happen, it is still quite difficult. At least, there are no corresponding signals for this at the moment.
However, I do not rule out attempts to return USD/CHF above 0.9183 or at least give a pullback to this broken level. In this situation, you can expect strong resistance in the area of 0.9180-0.9230. As you can see, the Tenkan line of the Ichimoku indicator passes slightly above the 0.9183 support broken on this timeframe, which is able to provide strong resistance to the price.
H4
On the four-hour chart, I stretched the grid of the Fibonacci tool for a fall of 0.9466-0.9060. As a rule, with such strong price movements, the correction is limited to the first level of 23.6, which passes at 0.9155. Taking into account the finding of 50 simple moving averages at 0.9225 and the second corrective level of 38.2, the price zone for potential sales is 0.9155-0.9225. If the pair can climb into this area and draw a bearish candle or a combination of candles on this or hourly charts, there will be little doubt about opening short positions for USD/CHF.
In my personal opinion, selling here and now at the bottom of the market is risky and extremely uncomfortable. I recommend waiting for the pullbacks of the selected price zones, and then consider opportunities to open short positions on this currency pair.
Have a nice weekend!