Fundamental overview:
USD/CHF is expected to trade in a higher range. It is underpinned by stronger dollar sentiment (ICE spot dollar index last 94.12 versus 93.29 early Monday), helped by San Francisco Fed research paper that says the initial annualized growth by 0.2% reported for Q1 has actually understates the economy's true strength. It contends "residual seasonal" factors that are in play with the headline weakness, masking what the regional Fed branch estimates the growth of 1.8%, negative Swiss interest rates, and the threat of Swiss National Bank CHF-selling intervention. The daily chart is mixed as five- and 15-day moving averages are declining, but the MACD and stochastics are turning bullish.
Technical comment:
The daily chart is negative-biased as the MACD and stochastics are bearish, five- and 15-day moving averages are declining.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. As long as the price holds above its pivot point, long positions are recommended with the first target at 0.9295 and the second target at 0.9355. In the alternative scenario, short positions are recommended with the first target at 0.9115 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 0.9060. The pivot point is at 0.9155.
Resistance levels:
0.9295
0.9355
0.94
Support levels:
0.9115
0.9060
0.8970
