Overview:
USD/CHF is consolidating with bearish bias after hitting seven-and-half month low of 0.9121 on Tuesday. The rate is weighed by spillover of EUR strength on CHF; broadly weaker demand for safe-haven USD as investor risk appetite increases. The down wave equality target at 0.911 is within striking distance, as the powerful bear wave extends into fresh seven-month lows. Last week's close beneath 0.9240 provides the impetus for further weakness towards 0.906 and the 0.9000 level and the 2012 low at 0.8931 is also within reach longer-term. Long-term resistance lies at 0.9240, where as strong short-term resistance is at 0.9145; the break above will move it forward to 0.9200 and 0.9187.
Preference:
Sell below 0.9145 with targets 0.9085 and 0.906 in extension.
Support Levels:
S1 - 0.9085
S2 - 0.906
S3 - 0.9039 (May 1 low)
Alternative scenario:
Buy above 0.9145. Above 0.9145 look for further upside with 0.916 and 0.918 as targets.
Resistance Levels:
R1 - 0.916
R2 - 0.9186-0.9194 band (Tuesday's high-Monday's high)
R3 - 0.9247 (Friday's high)
Technical Comment:
The pair remains within a bearish channel and is breaking below its support. Daily chart is negative-biased as MACD and stochastic are bearish, although latter is at oversold; five- & 15-day moving averages are falling.
