Key Points
- The US Dollar faced a lot of selling pressure recently and declined below 0.9500 against the Swiss Franc.
- There is a short-term ascending channel forming with resistance near 0.9485 on the hourly chart of USDCHF.
- Recently in the US, the Services Purchasing Managers Index (PMI) (Prelim) for July 2017 was released by Markit Economics.
- The outcome was above the forecast, as there was no decline in the PMI from the last 54.2.
USDCHF Technical Analysis
The US Dollar declined heavily from the 0.9680 swing high and moved below the 0.9600 and 0.9500 levels against the Swiss Franc. The USDCHF pair even traded below the 21 hourly simple moving average and traded as low as 0.9438 before finding a support.
The pair started a correction and currently following a short-term ascending channel with resistance near 0.9485 on the hourly chart.
There is a chance that the pair may test the 0.9495 or 0.9500 handle during the recent correction. An initial resistance is around the 23.6% Fib retracement level of the last decline from the 0.9619 high to 0.9436 low.
US Services PMI
Recently in the US, the Services Purchasing Managers Index (PMI) (Prelim) for July 2017 was released by Markit Economics. The market was positioned for a decline from the last reading of 54.2 to 54.0.
The actual result was above the forecast, as there was no decline in the PMI from the last 54.2. The US Composite Output Index rose to 54.2, up from the last reading of 53.9 and currently near 6-monht high. The report added that:
Higher levels of business activity were supported by a robust and accelerated upturn in new work during July. Measured overall, the latest increase in new orders received by private sector companies was the strongest for six months.
Overall, the USDCHF pair is correcting higher, but likely to face sellers near the 0.9485-90 resistance.
