As we look forward to the new week, reflecting on the currency movement in the past week is important as economic data continues to trickle in from nations worldwide.
USD/CHF Technical Analysis
The USD/CHF currency pair has experienced a significant decline recently, falling below the convergence of the 20 and 50-day exponential moving averages (EMA) and resulting in losses of over 1% on Friday’s close.
This decline has been caused by a combination of factors, including mixed nonfarm payrolls (NFP) reports, which have weighed heavily on the US dollar (USD), and the collapse of SVB Bank, which has caused a sharp drop in market sentiment.
As of writing, the USD/CHF pair is currently trading at 0.9216. During the decline from the convergence of the two EMAs, the pair hit a multi-week low at 0.9174 before the bulls could push the price back above the 0.92000 level later in the day.
However, with the relative strength index (RSI) making a bearish turn and the rate of change (RoC) supporting the sellers’ momentum, the path of least resistance for the pair appears to be to the downside.
In the short term, the premier support level for the USD/CHF pair is at 0.9200. If the pair breaks this level, it would likely test the day’s low at 0.91774. A further decline could see the pair target Valentine’s low at 0.9140. If the pair breaks below this level, it could expose the pair to lower levels, pegging at 0.91000, which would see a further drop to the 0.9059 level.
Alternatively, if the USD/CHF pair takes the alternate route, it could regain the 0.93000 level, keeping the bulls hopeful for a target of 0.9400. However, the bulls must first defeat the 20 and 50-day EMAs, which are currently dangling at 0.931 and 0.9319, respectively.
GBP/USD Technical Analysis
After hitting a 12-year low at 1.1802, the GBP/USD pair has been making a recovery attempt. Buyers have been trying all week to reclaim the 1.200 level, and at the time of writing, the pair is trading at 1.2040. Despite the recent news of SVB’s collapse, which is applying equal pressures in the US and EU, the pair still shows bullish momentum.
Although the GBP/USD pair managed to reclaim the 1.2000 level, the bias remains. The NFP reports caused the pound to hit the 200-day EMA at 1.2112. However, sellers pushed the price down later, and the pair hit the 1.2100 benchmark. The pair hit the 50-day EMA on the way down, leaving the trading rates at normal levels. The 20-day and 100-day EMAs are testing the current price, indicating a need for further consolidation.
For sellers to see a bearish scenario, the pair must crash the 20-day and 100-day EMAs at 1.2023 and 1.2010, respectively. After that, the 1.2000 level could be the next target, paving the way for further downside. The support levels that the pair would target include the 1.1900 level and the 1.1802 level if the drop persists.
For a bullish scenario, the pair must move above the 50-day EMA found at 1.2056. If the bulls want a chance of shifting the market trend, the next resistance would be 1.2100, closely followed by the 200-day EMA hovering at 1.2112.