USD/CHF was trading in the green on the H4 chart at the time of writing. However, the bias is bearish and the rate could extend its decline. The pair registered an important rebound after its last sell-off.
Now, the rebound seems complete and the price could resume its downtrend line. USD/CHF plunged as the US Dollar Index started a new sell-off despite good US data. Unfortunately, traders are expecting to see poor US retail sales data later today.
The USD will be ruined by poor US data reported today, so USD/CHF could drop much deeper. Only some better than expected US data could force the dollar to appreciate again in the short term.
USD/CHF Rebound Is Over!
USD/CHF rebounded from the 78.6% retracement level and it was almost to reach and retest the 61.8% level. Still, its failure to reach and retest the weekly R1 (0.9110) or the lower median line (LML) signaled selling pressure.
The pair plunged below the weekly pivot (0.9056) signaling that we may have a further decline towards 0.8985 or lower to the first warning line (WL1). In the short term, USD/CHF could come back to test and retest the pivot point and the outside sliding line (SL1) before dropping deeper.
Forecast!
The aggressive breakdown through the outside sliding line (SL1) is seen as a selling opportunity. A drop and close below 0.9020, today's low, is seen as a short opportunity as well.
The WL1 and the S1 are seen as potential downside targets, if USD/CHF resumes its downside movement.
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