Overview:
USD/CHF is expected to consolidate with the bullish bias after hitting three-and-a-half month high at 0.8990 on Wednesday.It is underpinned by the stronger USD undertone, contagion from weak euro on CHF, franc sales on soft CHF/JPY cross, and dovish Swiss National Bank’s monetary policy stance. But CHF sentiment are boosted by the stronger-than-expected Switzerland 1Q GDP growth (came in +2.0% on-year versus +1.8% forecast). USD/CHF gains are also tempered by the franc demand on soft EUR/CHF cross. Daily chart is positive-biased as MACD and stochastics are bullish, although the latter is at the overbought zone, five and 15-day moving averages are advancing.
Trading recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 0.8935. A breach of this target will move the pair further downwards to 0.8920. The pivot point stands at 0.8990. In case the price moves in the opposite direction and bounces back from the support level, and then it moves above its pivot point. It is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 0.9015 and the second target at 0.9030.
Resistance levels:
0.9015
0.9030
0.9065
Support levels:
0.8935
0.8920
0.89
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Performed by Ahsan Aslam, Analytical expert InstaForex Group © 2007-2014 |
Technical analysis of USD/CHF for May 29, 2014
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