The U.S. dollar is expected to continue recuperating over the next several days following a temporary break in recovery from last week. To read more about the current outlook on the greenback, check out our latest comprehensive analysis of the EURUSD.
The U.S. Census Bureau just posted the latest durable goods orders, beating the consensus forecasts. According to the findings of the report, U.S. factory activity nearly quadrupled in September, even though the greenback remained relatively unfazed by the news.
As can be seen on the 4H chart above, the price action of the USDCHF is nearing the peak of an ascending channel, which could possibly represent an early indication of an upcoming bearish reversal.
Such a change in the direction of the underlying price action could emerge around the 23.6 per cent Fibonacci retracement level at 0.93064, which has already prompted one false breakout recently.
On the one hand, the price action continues to be consolidating above the lower limit of the channel and the 50-day MA (in green), underpinning the minor support level at 0.92550, which is demonstrative of persisting bullish commitment.
On the other, the wavelengths represented on the MACD indicator are becoming increasingly smaller, representing an early indication of a divergence in the making. This is the type of reading that typically takes place prior to an upcoming bearish reversal, making it congruent with the overall sentiment.
Even still, the broader outlook remains ostensibly bullish-oriented, which is why USDCHF bears should not count on a very deep correction. Instead, the price action could bottom out either at the 0.92250 support or the 38.2 per cent Fibonacci at 0.92009.
The Census Bureau recorded a 1.8 per cent increase in U.S. durable goods orders in September, a sizable increase from a month prior when the index was reported at 0.5 per cent. Meanwhile, factory activity was expected to increase only by 0.7 per cent over the last thirty days.