The USD/CHF price plunged after reaching the 0.9234 level. Its failure to stay near yesterday’s high signaled that the sellers are still dominating the market.

The DXY’s sell-off forced the pair to come back down. We have a strong positive correlation between the Dollar Index and the USD/CHF pair, so you should also use it in trading.

The US dollar may rally again versus its rivals after the United States Unemployment Rate was reported better than expected. Surprisingly, the economic indicator dropped from 345K to 310K, far below 343K expected in the previous week. Still, it remains to see how the DXY will reach after its temporary decline.

The Dollar Index dropped ahead of the ECB. The European Central Bank maintained its Main Refinancing Rate, steady at 0.00% as expected. Tomorrow, the US is expected to release its PPI and the Core PPI economic figures. The PPI publication is seen as a high-impact indicator, and it’s expected to increase by 0.6% in August versus a 1.0% growth in July. In addition, the Core CPI could increase by 0.5% compared to 1.0% in the previous reporting period.

USD/CHF price technical analysis: Bearish dominance

(Click on image to enlarge)

USD/CHF 4-hour price chart

The USD/CHF pair dropped after registering a false breakout with great separation through the weekly R2 (0.9231) and above the ascending pitchfork’s upper median line (UML). It has escaped from the 0.9206 – 0.9099 range, but unfortunately, it has failed to stabilize above the range’s resistance. The USD/CHF pair dropped as much as 0.9166 today, where it has found demand again. Now it tries to stabilize above the weekly R1 (0.9185) level. Coming back and stabilizing above the 0.9189 former high could signal potential growth.

Technically, the current sell-off could represent only a retest of the broken levels before resuming its growth. Personally, I believe that an upside continuation could be activated only by a valid breakout above the 0.9242, by a new higher high.