USD Well Placed to Hit Parity With CHF

2018-10-04 14:00:00 Martin Essex, MSTA, Analyst

USDCHF price and chart analysis:

USDCHF has climbed with other pairs as the US Dollar has strengthened over the last few sessions on strong US economic data, higher US Treasury yields and a hawkish Federal Reserve.
Now it looks ready to hit the 1.00 level for the first time since July 20 if it can overcome the late July/early August highs.

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USDCHF looks towards the 1.00 level

USDCHF has been climbing rapidly since touching a lowpoint of 0.9542 on September 21 and now faces strong resistance ahead of the psychologically important 1.00 level, meaning parity between the two currencies, although that could well be overcome in due course.

USDCHF Price Chart, Daily Timeframe (April 27 – October 4, 2018)

Chart by IG

As the chart above shows, the key resistance band to overcome first is the range of highs between 0.9978 and 0.9985 touched between July 27 and August 15. Just above that lies further resistance between 0.9983 and 0.9993 from the highs reached between June 15 and June 28.

This suggests that a breakthrough will take time. However, there is plenty of support just below the current price from the 100-day moving average at 0.9856, the 50-day moving average at 0.9776, trendline support at 0.9761 and the 20-day moving average at 0.9712 – suggesting any setbacks are likely to be limited.

Nonetheless, a stop at the 0.9760 level would be wise in case USD suffers a setback.

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