The coast is clear in terms of top-tier economic catalysts today, but can the U.S. jobless claims report spark some volatility like in the past weeks?
Number crunchers are predicting a weak read this time, so the report might force the dollar to retreat from its recent rallies.
If that’s the case, I’m looking at an opportunity to go long USD at these bargain levels.
USD/CHF 1-hour Forex Chart by TV
Uncle Sam continues to churn out upbeat economic figures, but it looks like the dollar could use a break from its climb.
Can a downbeat initial jobless claims report spur some profit-taking today?
In the previous weeks, dollar pairs have been chalking up volatile reactions to this mid-tier report, as the figures contain clues on underlying employment trends.
Analysts are expecting to see a 232K increase in first-time claimants for the week ending Sept. 2, higher than the earlier 228K figure. An even larger gain could be enough to convince USD bulls to retreat, possibly taking USD/CHF down to the Fib retracement levels.
A number of FOMC officials are also scheduled to give testimonies later today, adding to potential volatility for the U.S. dollar.
I’ve got my eye on the area of interest spanned by the 38.2% to 50% levels right around the .8850 minor psychological mark, as these are also in line with the dynamic support at the moving averages. Just gotta stay on the lookout for reversal candlesticks in this region!
The 100 SMA is above the 200 SMA to indicate that support levels are more likely to hold than to break, likely lifting USD/CHF back up to the swing high near R2 (.8940). At the same time, Stochastic is heading up to suggest that bullish vibes are present.
However, a break below the 61.8% Fib that lines up with the pivot point (.8820) could hint that a reversal from the dollar rally is brewing.
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