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Starting off the new week with this potential technical setup on USD/CHF, ahead of this week’s U.S. employment update. Will support hold if retested?

Short-term Support Retest on USD/CHF?

USD/CHF 1-Hour Forex Chart
USD/CHF 1-Hour Forex Chart

It looks like a busy start of the new week for the Greenback as volatility /risk aversion vibes pick up, likely a reaction to the equity markets after news of stock liquidations from the hedge fund industry last week.

It doesn’t seem like it’s going to be a major market event for now (but that could change quickly), and if that catalyst fades, we could see choppy price action in the Greenback heading into the main event of the week, the monthly U.S. employment update.

With expectations of a March net jobs gain and dip in unemployment rate, getting long the Greenback makes sense, especially if U.S. Treasury yields continue to rise (the dollar has broadly gained since the rising Treasury yields narrative has lead the markets).

If this scenario plays out and USD/CHF dips ahead of the latest U.S. jobs data, we’re watching the previous levels of interest for potential support patterns before considering a long position.

On the one hour chart above of USD/CHF, we can see that the psychological levels of 0.9300 and 0.9350 were strong areas of interest, so the odds are they will draw in market players once again if retested. And with the longer-term trend in favor of the Greenback, the odds are also in favor of the bulls winning out in the new month if U.S. jobs data shows continued recovery.

If U.S. Treasury yields reverse and U.S. data disappoints, it could get choppy for USD/CHF, and if the market drops below the 0.9300 handle and holds, then we could see a short-term dip as technical traders / momentum players may try to play a change in sentiment for quick profits, and/or longer-term players take profits from the strong rally starting way back at the beginning of 2021.

What do you guys think? Are you looking to get into a long Dollar position? Or are you already long and think it’s time to take some profits off the table?

Let me know in the comments below, and as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.