OlympTrade_Analytics

USD/CHF Will the USD bounce back after testing the trend line?

FX:USDCHF   U.S. Dollar / Swiss Franc
ADP Nonfarm in the US was released on Wednesday at a very low level. In fact, this is the lowest levels of NFP from ADP since 2010.
The biggest fall is in the construction field (-36 000).
Challenger job cuts in May was released at 58.6K (the previous fact for April was 40K).
According to ISM Manufacturing PMI, ISM Manufacturing Employment for May was better and became 53.7.

As a result, we do expect that Nonfarm Payrolls may definitely be worse than the previous fact. The question is – will it be worse than the forecast (the market expects +175K).

On the other hand, not seasonally adjusted unemployment rate in Switzerland has to be better (2,3% against 2,4% in April).

Fundamentally CHF looks more appealing for the market than the US dollar . But technically the situation looks a bit different.

Technical analysis

On daily time frame we see the consolidation around minimums.
USD is testing the trend line and there is still the possibility to get reversal signals.
MACD lines tried to intersect each other, but it didn’t happen.
Williams %R reversed and crossed the lower line up. Parabolic SAR is close to the chart.

Summary: long positions are possible if USD breaks the local trend line , which is situated at 1,00200. If the downtrend continues – next target will be 0,98000 (200-EMA on the weekly time frame)
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