USDCHF Fails Around A Critical Resistance; Downside Likely?
US dollar traded higher recently against the Swiss franc, but failed around an important resistance area suggesting a short-term top in the USDCHF pair.
Australian Westpac Leading Index released by the Melbourne Institute registered a reading of 0% in December 2014, compared with the last reading of 0.1%.
Australian Consumer Price Index released by the RBA and republished by the Australian Bureau of Statistics managed to register a reading of 0.2%, compared with the expectation of 0.3% increase.
In terms of the yearly change, the Australian Consumer Price Index stood at 1.7% in QA 2014, compared with same quarter of the preceding year.
Australian RBA trimmed mean CPI was also released, which came in at 2.2% in QA 2014, compared with same quarter of the preceding year.
GBPUSD traded higher and looks set for more gains in the near term.
The US dollar surged higher against the Swiss franc recently, as the latter one got hammered by sellers. The USDCHF pair spiked towards the 0.9160 level, which acted as a barrier for the pair and ignited a down move. There is a resistance trend line formed on the 4 hour chart of the USDCHF pair, which acted as a barrier for the pair. The pair even traded below the 23.6% fib retracement level of the last leg from the 0.8521 low to 0.9159 high. However, stayed above the 38.2% fib level, which can be considered as a short-term positive sign. The 4H RSI is also well above the 50 level, which is a positive sign.
Intraday Support Level – 0.8910
Intraday Resistance Level – 0.9100
Overall, as long as the pair is above the 0.9100-50 area it might continue trading lower.
A break above the mentioned area could take the pair towards the 0.9400 level.
On the downside, the 0.8900-20 level is an important support for the pair. Any further losses might be limited considering the US dollar sellers have no solid reason to take it lower.
The British pound performed well recently, especially against the US dollar. The GBPUSD pair managed to break a critical resistance around the 1.5100-20 area, which acted as a barrier for several times. There is a bearish trend line formed on the 4 hour chart, which might continue to act as a catalyst for the pair moving ahead. We need to see whether the pair can settle above the same or not. A clear break could ignite more gains in GBPUSD in the near term. In that situation, the next area of interest would be around 200 MA.
Intraday Support Level – 1.5120
Intraday Resistance Level – 1.5220
Buying dips around the 100 MA look like a good option.
A break below the mentioned MA would call for more losses moving ahead.
On the downside, the 100 MA might act as a support. However, the most important support is seen around the 1.5100 area. The chances of a correction are likely in the near term, but it could be considered as a buying opportunity.
Success = few pips, thousand times
Ben Myers is one of the most respected and trusted names in the financial trading industry. Following a long and successful career with HSBC, Bank of Ireland and running his own investment firm
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