Fundamental Overview:
USD/CHF is expected to consolidate with a bearish bias. It is supported by the franc sales on soft CHF/JPY cross and on buoyant EUR/CHF cross and dovish Swiss National Bank's monetary policy. But USD/CHF upside is limited by the lower U.S. Treasury yields (10-year at 2.566% versus 2.587% late Friday), weaker dollar sentiment (ICE spot dollar index last 84.68 versus 84.74 early Monday) after surprise 1.8% drop in U.S. existing home sales to 5.05 million in August (versus forecast of 1.0% increase to 5.2 million), fall in Chicago Fed's National Activity Index to minus 0.21 in August from plus 0.26 in July, Kiwi demand on soft AUD/NZD cross and NZD-USD interest differential.
Technical Comments:
The daily chart is still positive-biased as MACD is bullish, stochastics stays elevated in the overbought zone, five and 15-day moving averages are advancing.
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 0.9340. A break of this target will move the pair further downwards to 0.9295. The pivot point stands at 0.9410. 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 0.9435 and the second target at 0.9460.
Resistance levels:
0.9435
0.9460
0.9480
Support levels:
0.9340
0.9295
0.9270
The material has been provided by InstaForex Company - www.instaforex.com
