Trading opportunities for currency pair: on the daily time-frame a double bottom pattern has formed. The price has got closer to the trend. After the publication of Friday’s data, the US dollar has renewed its rally throughout the market. There’s reason to believe that the franc will continue to cheapen this week. If there’s a break in the trend, the dollar will shift towards 0.9626. When it breaks 0.9626, the bulls will take the rate to 0.9860 (a maximum from 12th March).
For three out of five days the USD/CHF has closed with a growth. Two of those days closed with a doji (an insignificant change between the opening and closing price). A double bottom has been confirmed on the back of American growth. The growth of the dollar was facilitated by the announcements from ECB representatives and Friday’s data on US inflation.
On Tuesday Christian Noyer and Benoit Coeur let us know about the ECB’s readiness to extend their summer program of QE. On Friday traders reacted by buying the dollar on news of a growth in inflation since this gives reason to a possible increase in interest rates in the US.
The USD/CHF rate broke its peak of 0.9357 which was between the bases of 0.9072 and 0.9078. Due to inflation data on Friday, the dollar approached the trend line. If the dollar continues its offensive on all fronts, you can expect a break in the trend. In this case the dollar will shift to 0.9626. The minimum we can expect from a double bottom pattern. 0.9559 is a 50% drop from 1.0125 to 0.9072. A passing of 0.9626 will give the bulls impetus to take the rate to 0.9860 (a maximum from 12th March).
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