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USD/CHF has had a strong run but a technical resistance is keeping the bulls at bay. Is it time for the Greenback to see some retracement?

As you can see on the chart below, USD/CHF is finding resistance at the 1.0050 level that had also served as resistance for the pair back in November and early 2017. What’s more, there’s also a bearish divergence that’s flashing signals on the 4-hour time frame.

USD/CHF 4-hour Forex Chart
USD/CHF 4-hour Forex Chart

I’m normally long-term bearish on the dollar, but events over the past couple of days make it too easy for the bulls to attack.

For one thing, relief over the Syrian conflict not escalating after the U.S. made missiles rain helped U.S. equities and other U.S.-denominated assets.

And there was the positive U.S. GDP report AND rising U.S. Treasury yields that made the dollar just a bit more attractive against its peers.

But that was a few days ago. Mixed U.S. NFP report, a not-so-hawkish FOMC statement, and the U.S. backing out of Iran’s nuclear deal are bringing back the bears to the dollar’s yard.

While the Fed’s hawkish bias still puts the dollar ahead of most of the other currencies, I think recent headlines just might drag USD/CHF lower for the time being.

I’m looking at the .9800 – .9850 areas for a possible entry. The level lines up with previous areas of interest as well as the 38.2% – 50% Fib retracement levels.

Of course, USD/CHF might not retrace that strongly at all. It might even break above the consolidation and go on its merry way up. In that case, I’ll be looking to place small positions and maybe add as the pair makes new 2018 highs.

What do you think? Is the dollar in for more gains against the franc?

See also:
My Q1 2018 Forex Trade Review and Reflections
Latest version of the HLHB Trend-Catcher System

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