The USD/CHF rallied today and tries to erase the yesterday’s massive drop. We’ll see what will happen in the upcoming days because the rate is still located in the buyer’s territory. Price increased in the last hours also because the United States data have come in better earlier.

USD/CHF has come down to retest a major dynamic support, it has touched this line but failed to stay down signaling that the bulls could take the lead again. Is premature to say what will happen because it is still trapped below an important dynamic resistance, only a valid breakout will confirm a further increase in the upcoming weeks.

The Swiss Franc dropped even if the SNB maintained the Libor Rate on hold at -0.75%, matching expectations. The Switzerland PPI increased by 0.6%, much more compared to the 0.3% estimate and versus the 0.5% growth in the former reading period.

The USD received important support from the US data, the Retail Sales have increased by 0.8% in November, beating the 0.3% estimate and the 0.5% growth in the former reading period, while the Core Retail Sales have surged by 1.0%, more versus the 0.6% estimate. The Unemployment Claims have dropped sharply in the previous week, from 236K to 225K jobs, even if the specialists have forecasted an increase to 237K, the Import Prices rose by 0.7%, matching expectations. Moreover, the Flash Manufacturing PMI increased from 53.9 to 55.0 points signaling that the expansion continues in the Manufacturing sector.

The USD/CHF rallied and now is pressuring the 23.6% retracement level. It could climb towards the second warning line (wl2) of the former descending pitchfork after the WL2 retest. Price could climb much higher in the upcoming period if it will close the day much above the second warning line (WL2) of the major ascending pitchfork.

However, only a valid breakout above the wl2 will signal a further increase in the upcoming weeks, personally, I believe that it will take out this dynamic obstacle if will reach it and if will close on it.