According to the latest news, the US trade balance’s deficit shrank to $49.3B in November which is much better than the previous $55.5B. The USD/CHF is trading currently above 1.0000 level but the political turmoil and fears of slowing economic growth still remain the main market movers. It is important to say that some analysts expect significant progress in the US-China trade talks but a lot of work is to be done in US-China trade talks. The US president Donald Trump said that China’s economic weakness put the United States in a very good position in terms of trade talks. The Chinese economy is heading for a rough start to 2019 and the economy is continuing to slow further. On the other side, the economic growth in EU is decelerating at the beginning of the 2019 year and the inflation in EU is still below expectations. The pair needs to advance above 1.0050 level to extend moves higher and according to the fundamental analysis and current market sentiment, the direction for USD/CHF remains „neutral-to-bullish“.
The USD/CHF is advancing at the beginning of the week and the pair is trading currently around 1.0012. The US economy remains strong but the main reason why the case for raising rates has “weakened” is the trade war, Brexit and slowing growth in Europe and China. On this chart, I marked support and resistance levels – 1.0050 and 1.0100 represent the current resistance levels, 0.9950, 0.9900 and 0.9800 are the current support levels. If the price breaks 1.0050 we have an open way to 1.0100 and then to 1.0150. On the other side, if the price breaks 0.9900 support level, that will be a strong sell signal.
Recommendation: According to the technical analysis, the USD/CHF pair presents a neutral-to-bullish stance (short-term period). If the price breaks 1.0050 we have an open way to 1.0100 and then to 1.0150 resistance level. If the price falls below 0.9950 we have an open way to 0.9900. If the price falls below 0.9900 that could be a very good opportunity for the short term traders, short-term traders can put the stop loss at 0.9915 and take profit at 0.9860 or below.