Overview:
USD/CHF is expected to consolidate with bearish after hitting its two-year low of 0.8775 on Friday. It is undermined by the negative U.S. dollar sentiment, flows to safe-haven CHF as Russia-Ukraine tensions mount and stronger-than-expected Switzerland February KOF economic barometer (came in at 2.03 versus 2.0 forecast) and franc demand on soft EUR/CHF cross. Daily chart is negative-biased as MACD is bearish, stochastics is reverted to bearish mode at oversold zone; 5- and 15-day moving averages are declining.
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 0.8770. A breach of this target will move the pair further downwards to 0.8740. The pivot point stands at 0.8840. In case the price moves in the opposite direction, bounces back from support level, and then 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 0.8875 and the second target at 0.8910.
Resistance levels:
0.8875
0.8910
0.8935
Support levels:
0.8770
0.8740
0.8700
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