The USD/CHF increased further and could reach important upside targets very soon. It is going higher as the USDX has managed to resume the short term rebound. The dollar index is traded above the 93.50 psychological level, but remains to see if will have enough directional energy to stabilize above it. USDX jumped higher after the United States Initial Claims report was sent to the public.
Technically, the USDX should climb much higher on the short term, at least till will reach the 94 level where it could find resistance again. The dollar index increased, but you should be very careful because any rumors regarding the Federal Funds Rate hike could shake the index and could influence its movement.
The upcoming week will be crucial for the USD’s future movement, a rate hike could boost it while a disappointment will ruin it. The greenback received and unexpected help from the Unemployment Claims, which have decreased again, from 238K to 236K, even if the specialists have predicted an increase to 239K, we’ll see what will happen in the upcoming hours because the first reaction was negative. On the other hand, the CHF dropped in the morning, even if the Switzerland Unemployment Rate decreased from 3.1% to 3.0%, has come below the 3.1% estimate, while the Foreign Currency Reserves indicator was reported at 738B, lower versus the 742B in the former reading period.
Price made a false breakdown below the WL2 of the major ascending pitchfork and below the first warning line (wl1) of the descending pitchfork. You can see that the price failed to reach the 505 Fibonacci level signaling that the corrective phase is completed. Personally, I believe that it will take out the resistance from the second warning line (wl2) of the descending pitchfork if will touch it. Only another failure to reach the wl2 will signal a minor drop towards the WL2. USD/CHF will increase further if the dollar index will resume the bullish momentum, however, we may see a minor USDX’s decrease because it could come down to retest a broken resistance.