Key Points
- The US Dollar recently found support near the 21 hourly simple moving average vs the Japanese yen, and traded higher.
- There was a resistance trend line formed on the hourly chart of the USDCHF pair, which prevented further gains.
- In Switzerland today, the SVME Manufacturing Purchasing Managers Index (PMI) was released.
- The market was not expecting any major increase, but it climbed from 51 to 53.2 in Sep 2016.
USDCHF Technical Analysis
The US Dollar managed to recover from the 21 hourly simple moving average vs the Japanese yen, but found sellers on the upside. The 61.8% Fib retracement level of the last drop from the 0.9754 high to 0.9688 low acted as a resistance and prevented an upside move.
The USDCHF pair is currently finding support near a short-term bullish trend line formed on the hourly chart.
However, it looks like the US Dollar sellers may succeed in breaking the trend line support, which may ignite more losses.
SVME Manufacturing Purchasing Managers Index
Today in Switzerland, the SVME Manufacturing Purchasing Managers Index (PMI), which captures business conditions in the manufacturing sector was released by the SVME and Credit Suisse.
The market was expecting a minor increase from the last reading 51 to 51.5 in Sep 2016. However, the result was above the forecast, as there was a rise of 53.2 in Sep 2016. The report stated that “The progression of the PMI is mostly linked to the improvement of the front of orders (the corresponding sub-index has jumped 4.4 points) and longer delivery times (+3.6 points). Two developments undeniably positive. Simultaneously, the sub-index”.
It looks like Swiss Franc may trade a few pips higher in the near term, and USDCHF could test the 21 hourly SMA.
