Fundamental Overview:
USD/CHF is expected to consolidate with a bullish bias after hitting a 14-month high 0.9459 on Wednesday. It is underpinned by the positive dollar sentiment (ICE spot dollar index last 85.06 versus 84.70 early Wednesday) and yen-funded carry trades amid improved investor risk appetite (VIX fear gauge eased 11.12% to 13.27; S&P 500 rose 0.78% to close at 1,998.3 overnight) on larger-than-expected 18% on-month increase in U.S. August new home sales to 504,000 for the biggest one-month jump since 1992 and the highest level of sales since May 2008 (versus forecast +3.4%), contagion from weak EUR on CHF and dovish Swiss National Bank's monetary policy and 0.32-point drop in UBS Switzerland consumption indicator to 1.35 in August and franc sales on cross trades versus major currencies.
Technical Comments:
Daily chart is positive-biased as MACD is bullish, stochastics stays elevated at the overbought zone, five and 15-day moving averages are 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 0.9520 and the second target at 0.9545. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.9380. A break of this target would push the pair further downwards and one may expect the second target at 0.9420. The pivot point is at 0.9380.
Resistance levels:
0.9520
0.9545
0.9570
Support levels:
0.9380
0.9340
0.9295
The material has been provided by InstaForex Company - www.instaforex.com
