Overview:
USD/CHF continues to range-trade. The rate is supported by broadly stronger demand for safe-haven USD after lower-than-expected China official December manufacturing PMI. But USD/CHF upside is limited by hopes that U.S. House of Representatives would clear deal to avoid the fiscal cliff. Daily chart is mixed as MACD and stochastic are in bullish mode; but five-day moving average is meandering sideways, inside-day-range pattern was completed on Monday. As long as 0.9155 is resistance, look for choppy price action with a bearish bias. It is suggested to take short positions below 0.9155, with targets at 0.9035 and 0.8995 in extension. Above 0.9155 look for further upside, with 0.9180 and 0.9195 as targets.
Preference:
Sell below 0.9155 with targets 0.908 and 0.9035 in extension.
Support Levels:
S1 - 0.9080 (seven-and-a-half month low hit Dec. 20)
S2 - 0.9039 (May 1 low)
S3 - 0.8998 (April 2 low)
Alternative scenario:
Buy above 0.9155. Above 0.9155 look for further upside with 0.918 and 0.9195 as targets.
Resistance Levels:
R1 - 0.9181 (Friday's high)
R2 - 0.9194 (Dec. 17 high)
R3 - 0.9247 (Dec. 14 high)
Technical Comment:
The pair is posting a rebound but stands below its resistance.
