Thursday’s trading session is shaping up to be an exhilarating one for the USDCHF currency pair as a series of significant economic data releases take centre stage. Kicking off the day, Switzerland unveiled its latest GDP statistics, providing crucial insights into the country’s economic health. The year-over-year GDP growth came in at 0.6%, surpassing the previous figure of 0.3%. However, it fell short of market expectations, missing the consensus forecast of 0.7%. Meanwhile, quarter-on-quarter GDP growth remained stagnant at 0.3%, failing to meet the projected slowdown to 0.1%.
This mixed report injected a sense of uncertainty into the currency pair, causing traders to closely monitor developments. All eyes are now on the upcoming US PCE report, scheduled for later in the day. Anticipation is high as market participants eagerly await the release of this critical data, which is expected to provide further clarity and potentially shape the directional trend for the USDCHF pair. Amidst recent sideways trading, the outcome of the PCE report holds significant importance in determining the future trajectory of the currency pair.
Technical
On the daily chart, an ascending channel is in play, with the price action teetering near the dynamic support, which converges with the Fibonacci midpoint of 0.8791. The 100-SMA (orange line) is at a point of convergence with the 25-SMA (green line) near this support level, creating a challenging barrier for the sellers to cross to enforce a breakdown.
However, the currency pair could look for support near 0.8712 if the breakdown occurs. This could create a pivot to retest the breakdown level, but if the pair continues its descent, the longer-term trend could look toward 0.8632, where the 50-SMA (blue line) offers additional support.
On the upside, if the dynamic support of the channel holds, the bullish trend may continue. Resistance at 0.8825 could create challenges, but clearance above could see the uptrend reach its 61.8% Fibonacci golden ratio at 0.8899. A pullback is possible here back toward the support of the channel, after which sustained bullish momentum could meet higher resistance at 0.9019.
Summary
The USDCHF currency pair holds its uptrend intact as a crucial day kicked off on the back foot. The US PCE data could trigger a directional move, with the support at the Fibonacci midpoint of 0.8791 being a pivotal one to monitor.
Sources: Koyfin, Tradingview, Reuters
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
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