By: Bastian Rubben
Wall Street opened the first day of the trading week in the red zone on the background of mixed data. Personal income was lower than expected and personal spending, which is vital to the economy was a bit higher that the consensus. The investors will focus today on the ISM manufacturing data, but pay attention to the fact that the European banks are closed today due to the holiday, which might cause low liquidity in the forex markets.
The American dollar did not make any significant change against the major currencies yesterday, in spite the declines of the US stock markets. However, as I mentioned, the European banks are closed today and the USD might take advantage of that in order to strengthen against the other currencies, such as the Swiss Franc. The pair USD/CHF is moving in a triangle pattern and it reached the lower edge of the triangle. It seems that the meeting point between the buyers and the sellers is getting close and if the current pattern remains, the USD might turn over and rise towards the upper hedge at 0.915. Stochastic low levels indicate for overselling situation, which supports this estimation. However, if the CHF continue strengthening and breaks-down the current support, the pair might slide to the 200 SMA at 0.8950.
