🔰 Pair Name : USD/CHF
🔰 Time Frame : 4H
🔰 Scale Type : MID Scale
🔰 Direction : LONG/BUY
Today, the US Dollar exhibited marginal strength against the Australian and New Zealand Dollars, while facing weakness against the Japanese Yen and Swiss Franc as investors adopted a risk-off approach.
The currency movements can be attributed to disappointing data from China, which revealed an overall softening of the economy, with a year-on-year growth rate of 6.3% in the second quarter. This figure fell short of the previous quarter's forecasts of 7.3% and 4.5%.
Specifically, retail sales grew by 3.1% year-on-year until the end of June, slightly below the estimated 3.2% and significantly lower than the 12.7% recorded in May.
Despite the mixed data, there were some encouraging signs in the Chinese economy. Industrial production expanded by 4.4% year-on-year until the end of June, surpassing expectations of 2.7% and the previous figure of 3.5%. Additionally, fixed asset investment outperformed expectations, growing by 3.8% over the January to June period, compared to the anticipated 3.5%.
In the Asian-Pacific markets, China's CSI 300 equity index experienced a decline of more than 1%, while other APAC markets had a subdued start to the trading week. Tokyo remained closed for a holiday, and markets in Hong Kong and Taiwan were impacted by typhoon Talim. Futures indicate a slightly negative start to the Wall Street cash session.
Meanwhile, G-20 Finance Ministers and central bankers gathered in India today for their meeting. While this event is expected to generate numerous headlines, it's worth noting that no speeches from Federal Reserve speakers are scheduled, as they have entered a communications blackout in preparation for the Federal Open Market Committee (FOMC) meeting on July 26th. The market has already priced in a 25 basis point lift at the conclave.
In the commodities market, crude oil slipped before Monday's session, with both WTI and Brent futures contracts down approximately 1%. On the other hand, gold maintained relative stability, trading near the middle of its range, just above the USD 1950 level.
In the European markets, several central bank voting members, including President Christine Lagarde, will deliver speeches today, potentially influencing market sentiment.
Regarding the DXY (USD) index, it reached a 15-month low on Friday, breaking below prior support levels in the 100.80 – 101.00 range. This area could now act as a breakpoint resistance zone, with another resistance point anticipated at 101.92, followed by the peak of 103.57.
The recent sell-off caused the DXY to breach below the lower band of the 21-day simple moving average (SMA) based Bollinger Band. A close back inside the band might indicate a potential pause in the bearish trend or signal a potential reversal.
Looking back at last Friday's trading, the DXY recorded a low of 99.58, just above the April 2022 low of 99.57. These levels may provide support ahead of a potential break point at 99.42.
It's worth noting that the USD/CHF pair appears to have landed on the 4-hour/daily demand zone, positioned at the bottom of the downward channel, suggesting a significant market imbalance. This imbalance indicates a need for correction to rebalance the market with more selling positions. If the market continues to decline, we may expect further downward movement after the correction, filling up the imbalance above. As traders, we should closely monitor these developments to capitalize on potential trading opportunities.
🔰 Time Frame : 4H
🔰 Scale Type : MID Scale
🔰 Direction : LONG/BUY
Today, the US Dollar exhibited marginal strength against the Australian and New Zealand Dollars, while facing weakness against the Japanese Yen and Swiss Franc as investors adopted a risk-off approach.
The currency movements can be attributed to disappointing data from China, which revealed an overall softening of the economy, with a year-on-year growth rate of 6.3% in the second quarter. This figure fell short of the previous quarter's forecasts of 7.3% and 4.5%.
Specifically, retail sales grew by 3.1% year-on-year until the end of June, slightly below the estimated 3.2% and significantly lower than the 12.7% recorded in May.
Despite the mixed data, there were some encouraging signs in the Chinese economy. Industrial production expanded by 4.4% year-on-year until the end of June, surpassing expectations of 2.7% and the previous figure of 3.5%. Additionally, fixed asset investment outperformed expectations, growing by 3.8% over the January to June period, compared to the anticipated 3.5%.
In the Asian-Pacific markets, China's CSI 300 equity index experienced a decline of more than 1%, while other APAC markets had a subdued start to the trading week. Tokyo remained closed for a holiday, and markets in Hong Kong and Taiwan were impacted by typhoon Talim. Futures indicate a slightly negative start to the Wall Street cash session.
Meanwhile, G-20 Finance Ministers and central bankers gathered in India today for their meeting. While this event is expected to generate numerous headlines, it's worth noting that no speeches from Federal Reserve speakers are scheduled, as they have entered a communications blackout in preparation for the Federal Open Market Committee (FOMC) meeting on July 26th. The market has already priced in a 25 basis point lift at the conclave.
In the commodities market, crude oil slipped before Monday's session, with both WTI and Brent futures contracts down approximately 1%. On the other hand, gold maintained relative stability, trading near the middle of its range, just above the USD 1950 level.
In the European markets, several central bank voting members, including President Christine Lagarde, will deliver speeches today, potentially influencing market sentiment.
Regarding the DXY (USD) index, it reached a 15-month low on Friday, breaking below prior support levels in the 100.80 – 101.00 range. This area could now act as a breakpoint resistance zone, with another resistance point anticipated at 101.92, followed by the peak of 103.57.
The recent sell-off caused the DXY to breach below the lower band of the 21-day simple moving average (SMA) based Bollinger Band. A close back inside the band might indicate a potential pause in the bearish trend or signal a potential reversal.
Looking back at last Friday's trading, the DXY recorded a low of 99.58, just above the April 2022 low of 99.57. These levels may provide support ahead of a potential break point at 99.42.
It's worth noting that the USD/CHF pair appears to have landed on the 4-hour/daily demand zone, positioned at the bottom of the downward channel, suggesting a significant market imbalance. This imbalance indicates a need for correction to rebalance the market with more selling positions. If the market continues to decline, we may expect further downward movement after the correction, filling up the imbalance above. As traders, we should closely monitor these developments to capitalize on potential trading opportunities.
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Comment:
USDCHF is ready to take off
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📈🚀 Trade Update: Hope you jumped in on this one and made a massive profit!🚀💰