Greenback on its best track since 2015.
“Bullish prospect toward the US dollar as US economy recovers substantially.”
Greenback extended its surge during Asian trading hours, on track for its best monthly gains since 2015. Market participants continues to hoard the currency, thrusting the US dollar to its highest level since pre-pandemic over the backdrop of diverging global monetary policy and economic outlook. In Europe, investors are concerned over energy security and economic prospects after Russia’s gas company Gazprom announced to suspend natural gas delivery to Poland and Bulgaria. On the other hand, rising coronavirus cases in China with its current hot spot shifted to Beijing, prompts market fears towards the world’s second largest economy. Due to China’s “zero-covid policy”, investors are expecting more lockdowns soon as Omicron spreads through the community at a faster pace.
Quick recap on USDCHF
Aggressive bulls can be seen pushing the pair forward after regaining its momentum from the downside.
USDCHF Weekly Technical Analysis
Bullish momentum received a substantial boost as the pair staged its rebound near the 0.9200 psychological area mark. Overall structure tilts towards the upside following subsequent bullish candlesticks.
USDCHF Daily Technical Analysis
From the daily chart, USDCHF extended its gains, suggesting a rather persistent bullish momentum that could persist in the near term.
Trading Idea
Order: BUY
ENTRY: 0.9643
STOP LOSS: 0.9540
Target 1: 0.9754
Target 2: 0.9874
ZFX Analyst’s Comment
While market expectations towards the Federal Reserve to aggressively raise interest rates are still running hot, we may expect the US dollar to extend its rise in the near term. Likewise, economic implications due to energy supply conundrum in the EU as well as coronavirus resurgence in China may cap any substantial shift in sentiment towards risky assets for the time being.
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Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.
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