USD/CHF Candlesticks and Ichimoku Analysis

Although the greenback extended recent decline from 1.1967 to as low as 1.0592 last week, dollar found good support there and staged a strong rebound towards the end of last week and the release of better-than-expected U.S. NFP data lifted dollar sharply on Friday to as high as 1.0908. On the weekly chart, the pair looks set to test the bottom of Ichimoku cloud (currently locating at 1.0969), then towards 1.1160 (previous support turned resistance and this level is also just below the current level of the Tenkan-Sen), however, the top of Ichimoku cloud (now at 1.1435) should cap upside.

On the downside, expect pullback to be limited to 1.0760/70 and dollar should rallied again from there to abovementioned upside targets. Only below 1.0640/50 would risk a re-test of recent low at 1.0592, break there would indicate the decline from 1.1967 is still in progress for weakness towards 1.0500 but chart support at 1.0370 should remain intact and bring another strong rebound later.

On the daily chart, despite trading in relatively narrow range initially last week, dollar's strong rebound above the Tenkan-Sen last Friday signals recent decline has formed a temporary low at 1.0592 and consolidation above this level would take place with upside bias for correction towards the Kijun-Sen (now at 1.1007), then towards 1.1167, being 50% Fibonacci retracement of 1.1742 to 1.0592, however, dollar shall falter below the resistance at 1.1263 and bring retreat.

On the downside, whilst a minor pullback to 1.0800 cannot be ruled out, renewed buying interest should emerge around the Tenkan-Sen (currently locating at 1.0773) and bring further gain to aforesaid upside targets. Below 1.0700 would defer and risk weakness to 1.0640/50 but only a break there would abort our bullish view and shift risk to the downside for a re-test of 1.0592 support.