Market Forecast 28/08/2017

USD/CHF Forecast

Key Points

  • The US Dollar remains in a super bearish trend and currently trading below the 0.9580 pivot against the Swiss Franc.
  • There is a major bearish trend line forming with resistance at 0.9640 on the hourly chart of USD/CHF.
  • The US Goods Trade Balance for July 2017 posted a trade deficit of $-65B, more than the forecast of $-64.5B.

The US Dollar struggled a lot recently and declined below the 0.9700 and 0.9650 support levels against the Swiss Franc. The USD/CHF pair even traded below the 0.9600 handle and traded as low as 0.9525 recently.

Before the downside, the pair broke a bullish trend line at 0.9630 on the hourly chart. At the moment, the pair is recovering and might test the 23.6% Fib retracement level of the last decline from the 0.9659 high to 0.9525 low.

On the upside, there is a major bearish trend line forming with resistance at 0.9640 on the hourly chart. The trend line is also positioned near the last swing high of 0.9630, the 100 hourly simple moving average and the 76.4% Fib retracement level of the last decline from the 0.9659 high to 0.9525 low.

Selling rallies in the near term towards 0.9600 might be considered.

US Goods Trade Balance

Today in the US, the Goods Trade Balance for July 2017 was released by the US Bureau of Economic Analysis. The forecast was slated for a trade deficit of $-64.5B compared with the last $-64B.

However, the outcome was a bit on the lower side, as there was a trade deficit of $-65B. Exports of goods in July 2017 were down by $1.6 billion to $127.1 billion. Similarly, Imports of goods were down by $0.5 billion less than June 2017 to $192.2 billion.

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GBP/JPY Forecast

Key Points

  • The British Pound is following a bullish path and trading well above the 140.00 handle against the Japanese Yen.
  • An ascending channel with support at 140.60 is holding the uptrend in the GBP/JPY pair.

The British Pound started a decent upside move from the 139.30 swing low against the Japanese Yen. The GBP/JPY pair gained pace and moved above the 140.00 handle and the 100 hourly simple moving average.

The pair has already breached the 76.4% Fib retracement level of the last decline from the 141.02 high to 139.29 low. Therefore, there are chances of it gaining pace above the 141.10 level.

If buyers remain in control, the 1.236 extension the last decline from the 141.02 high to 139.29 low could be tested. There is also an ascending channel with support at 140.60 forming on the hourly chart. As long as the pair remains in the channel and the 140.50 support, there are chances of further gains in the near term.

The best case scenario could be a test of the 1.618 extension the last decline from the 141.02 high to 139.29 low at 142.09. Buying dips near the channel support can be considered with a stop below the 140.60 support area and targets as 141.40 and 142.00.

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