USDCHF At Risk Of A Major Break

Key Highlights

• US dollar dived sharply against the Swiss franc and other major currencies, as sellers managed to gain strength exposing a major break in the USDCHF pair in the near term.

• In New Zealand, the Trade balance which is the difference between the value of country's exports and imports, released by Statistics New Zealand posted a trade deficit of $-2.41B in March 2015, compared to the same month a year ago and the market was expecting it post a deficit of $-2.74B.

• In terms of the monthly change, the New Zealand Trade balance registered a trade surplus of $631M in March 2015, compared to the preceding month whereas the market was expecting it be around $341M.

• New Zealand exports and imports came in at $4.93B and $4.30B respectively in March 2015.

• New Zealand ANZ Business Outlook i.e. designed to provide a snapshot of business opinions regarding the expecting future state of their business released by The National Bank of New Zealand came in at 41.3% in March 2015, compared to the last increase of 42.2%

• New Zealand Business Confidence highlighting the business outlook in New Zealand released by the ANZ posted a reading of 30.2 in April 2015.

USDCHF

The US dollar weakened a lot Intraday against the Swiss Franc, and most importantly tested a crucial support area which holds the key for the pair in the near term. There is a monster support formed around the 0.9480 level i.e. a major swing area for the pair. It is currently testing the highlighted support area, which if breached might open the doors for more losses in the near term. A break below the same might take it towards the 0.9400 level which can be seen as the next support area. There is a chance of a correction as well, but might face resistance around the 0.9540 level.

Intraday Support Level – 0.9480

Intraday Resistance Level – 0.9540

• Overall, as long as the pair is above the highlighted trend line it might continue moving higher.

• A break below the same could ignite more losses in the short term.

On the upside, the 100 SMA holds a lot of importance for the USDCHF pair moving ahead.

GBPUSD

As mentioned the US dollar weakened, which was visible in the GBPUSD pair as well. The pair surged higher and traded above the 1.5300 level, and following a nice bullish trend. There is a support trend line formed on the hourly chart of the GBPUSD pair, which can be considered as a buying area. Initial support is around the 23.6% fib retracement level of the last leg from the 1.4856 low to 1.5336 high. Let us see how the pair trades in the short term.

Intraday Support Level – 1.5240

Intraday Resistance Level – 1.5380

• Buying dips around the bullish trend line looks like a good option.

• A break below the same might call for more losses.

If the GBPUSD pair continues to trade higher and settles above 1.5340, then a move towards 1.5380 is possible.  

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