The US Consumer Confidence data from the Conference Board Inc came in today at 135.1, which was higher than the market consensus figure of 129.3. However, this was marginally lower than the previous month’s figure of 135.7.
This latest release did not meet the required deviation required to expect very good volatility that would be suitable for a news trade. As such, the response of the US Dollar on several currency major pairs was pretty muted. The only reasonable move occurred on the USDCHF, which saw a 28-pip upside move.
The USDCHF has witnessed quite a significant upside recovery since Friday’s steep drop when safe haven demand drove traders into the Swiss France and caused a selloff in the USDCHF pair. It is presently taking a slight breather after hitting an intraday high of 0.9836.
The 4-hour chart shows that the price recovery has taken the shape of a bullish pennant. The projected price move from the pennant could see the USDCHF push as far as the R2 pivot price of 0.9874, but the lack of follow through after hitting the R1 pivot of 0.9830 may prevent the pair from reaching this full projection potential.
Failure to breach 0.9830 may lead to a downside test of 0.9771 in the near term. Any violation of this level will see the pair being dragged down to 0.9726 and possibly 0.9680.
On the flip side, a break above 0.9830 could see the pair attain the 0.9874 mark, which would complete the bullish pennant. A break above this level on the back of strong USD demand could see a push to the 0.9933 mark.