Technical analysis of USD/CHF for December 09, 2014 Market Analysis Review

Fundamental overview:

USD/CHF is expected to consolidate after hitting a one-and-a-half year high at 0.9818 on Monday. It is undermined by the weaker USD sentiment(ICE spot dollar index last 89.10 versus 89.38 early Monday) as U.S. Treasury yields fell overnight (10-year at 2.257% versus 2.307% late Friday); Bank of International Settlements warned on Sunday in its most recent quarterly report that there are potential adverse implications from a prolonged rally in the dollar for economies beyond the U.S. that have large U.S. dollar-denominated liabilities; Japan's export sales. But the USD sentiment is soothed by 6.1% rise in Conference Board U.S. employment trends index to 123.24 in November. But USD/CHF downside is limited by the franc sales on soft CHF/JPY cross and unexpected 0.1% on-year drop in Switzerland November CPI (versus forecast 0.0%); ultra-loose Swiss National Bank's monetary policy. Daily chart is still positive-biased as MACD is bullish, stochastics stays elevated at overbought levels, 5 and 15-day moving averages are advancing.

Technical comment:

Daily chart is positive-biased as stochastics is bullish, MACD histogram bars are turning positive, five-day moving average is above 15-day moving average and is advancing.

Trading recommendations:

The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price is keeping above its pivot point, a long position is recommended with the first target at 0.9795 and the second target at 0.9820. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.9705. A break of this target would push the pair further downwards and one may expect the second target at 0.9675. The pivot point is at 0.9740.

Resistance levels:

0.9795

0.9820

0.9855

Support levels:

0.9705

0.9675

0.9635

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