Technical analysis of USD/CHF for October 16, 2014 Market Analysis Review

Fundamental overview:

USD/CHF is expected to consolidate with bearish bias after hitting three-week low 0.9358 on Wednesday. It is weighed by the negative USD sentiment and franc demand on soft EUR/CHF, GBP/CHF and CAD/CHF crosses. But CHF sentiment is dented by the drop in Switzerland ZEW-Credit Suisse indicator of economic sentiment to minus 30.7 in October--the weakest reading since September 2012--from minus 7.7 in September. USD/CHF losses are also tempered by the dovish Swiss National Bank's monetary policy.

Technical comments:
Daily chart is negative-biased as bearish outside-day-range pattern was completed on Wednesday, MACD and stochastics are bearish, five-day moving average is below 15-day MA and is declining.

Trading recommendations:

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 0.9385. A break of this target will move the pair further downwards to 0.9350. The pivot point stands at 0.9500. In case the price moves in the opposite direction and bounces back from the support level, then it will 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 0.9525 and the second target at 0.9560.

Resistance levels:

0.9525

0.9560

0.96



Support levels:

0.9385

0.9350

0.9315

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