Overview:
USD/CHF is expected to trade in lower range after hitting three-week low 0.8961 Thursday. It is undermined by negative dollar sentiment, franc demand on soft EUR/CHF cross and Swiss central bank that increasing the buffer banks will need to hold against property exposure from 1% to 2%. "The franc appreciated because the decision could lead to repatriation into francs as Swiss banks try to replenish their capital positions," said Valentin Marinov, a currencies strategist at Citigroup. But USD/CHF losses are tempered by the franc sales on soft CHF/JPY cross and positions adjustment before weekend. Daily chart is negative-biased as bearish outside-day-range pattern completed Thursday, stochastics is in bearish mode, MACD is turning bearish.
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. A short position is recommended with the first target at 0.89 in mind. A breach of this target will move the pair further downwards to 0.888. The pivot point stands at 0.9015. In case the price moves in the opposite direction, bounces back from support, and moves above its pivot point, the price is most favourably expected to move further to the upside. In that scenario a long position is recommended with the first target at 0.904 and the second target at 0.9085.
Resistance levels:
0.904
0.908
0.912
Support levels:
0.89
0.888
0.885
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