USDCHF broke above the 0.8300 resistance zone and a daily down channel. ActionForex's analysis points to 0.8400 as the next target, helped by a stronger US dollar. A daily close below 0.8010 would cancel the bullish scenario.
USDCHF broke the resistance zone around 0.8300 and the trendline of the daily down channel from the middle of October. The 0.8300 level was support from the start of October and stopped wave (b) at the end of October.
The breakout accelerated the active impulse wave iii of the C-wave of the ABC correction (4) from the end of August.
Dollar strength drives the move
The analysis describes strongly bullish US dollar sentiment this week. The dollar strengthened after higher-than-expected US inflation data for October raised the odds of a Fed rate hike in December to 87%.
As a result, USDCHF can be expected to rise toward 0.8400, the next key resistance level, which stopped wave i in the middle of October. A breakout there would open the way toward 0.8450.
Levels to watch
However, if 0.8400 holds, USDCHF can correct down toward 0.8300, which now acts as support. A daily close below the pivotal support level 0.8010 would cancel the bullish scenario.
Next, the Fed decision on 9 December and the SNB decision on 10 December are the key events for the pair, which stays bullish above 0.8300.
Source: ActionForex
Trading involves risk.
Risk Disclaimer
