Fundamental overview:
USD/CHF is expected to trade in a lower range. It is undermined by softer USD sentiment (ICE spot dollar index last 86.95 versus 87.29 early Tuesday) after wider-than-expected U.S. September trade deficit of $43.03 billion (versus forecast $40.6 billion deficit), sharp drop in U.S. ISM-NY current-business index to 54.8 in October from 63.7 in September; lower U.S. Treasury yields (10-year at 2.335% versus% 2.346% late Monday); diminished investor risk appetite (VIX fear gauge rose 1.09% to 14.89, S&P 500 closed 0.28% lower at 2,012.1 overnight) as caution prevails ahead of the U.S. nonfarm payrolls report Friday, spillover strength from rebounding EUR on CHF and franc demand on buoyant CHF/JPY cross amid weak yen sentiment. But USD/CHF losses are tempered by the dovish Swiss National Bank's monetary policy.
Technical comments:
Daily chart is mixed as MACD is bullish, five-day moving average is above 15-day moving average and is advancing but stochastics is turning bearish at overbought zone.
Data focus:
0815 GMT Switzerland October CPI. .
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 0.77. A break of this target will move the pair further downwards to 0.7670. The pivot point stands at 0.78. In case the price moves in the opposite direction and bounces back from the support level, then it will move 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 0.7880 and the second target at 0.7950.
Resistance levels:
0.9695
0.9750
0.98
Support levels:
0.9575
0.9535
0.95
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