- EUR/CHF has unfolded a correction over the last four days.
- This move now looks almost complete and the bullish prior move is likely to resume.
EUR/CHF pulls back in the middle of a recovery rally. Despite the overall bearish medium-term trend the pair is showing signs it could press higher in the short-term.
EUR/CHF Daily Chart
EUR/CHF formed a Bullish Engulfing Japanese candlestick pattern on the day it bottomed on September 11 (shaded rectangle). This happens when price reaches a new low in a downtrend, reverses during the same day and closes higher. When the body of the recovery candle encompasses – or “engulfs” – the whole of the previous day’s body it is known in technical analysis as a Bullish Engulfing. The following day was a green up day adding confirmation to the Bullish Engulfing. The whole pattern is a short-term bullish signal.
Not long after the recovery, the pair pulled back on September 12, however, the correction has been shallow and seems to have traced out a vague three-wave corrective pattern. This suggests the bullish rebound will probably resume. The correction also looks close to completion.
A break above 0.9434 (September 12 high) would confirm a continuation higher, with the next target at 0.9464, followed by 0.9513 in the case of a particularly bullish move.
A break below 0.9369 would probably invalidate the bullish hypothesis and suggest a more neutral or bearish outlook.
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USD/CHF holds losses after soft US labor market data
2024-09-06
Pair bottomed at a low of 0.8375 and then recovered above 0.8400 but holds daily losses.
US August NFPs came in lower than expected, following this weak labor market data trend.
Investors might bet on a bigger cut in September from the Fed.
On Friday, the USD/CHF fell to a daily low of 0.8375 and then recovered back above 0.8400. The upside, however, is limited as the US reported weak labor market figures.
The US Dollar’s appeal diminished after the release of a lower-than-expected NFP report for August, which showed the creation of 142,000 new jobs, falling short of the 160,000 forecast but surpassing July’s revised figure of 89,000. The Unemployment Rate decreased as anticipated, moving from 4.3% to 4.2%. Additionally, Average Hourly Earnings increased by 3.8%
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