Overview
USD/CHF is in range-trade. The rate is supported by contagion from the weak euro on the franc. But USD/CHF upside is limited by unwinding of CHF-funded carry trades amid increased risk aversion. Data focus: 07:00 GMT Swiss December trade balance. Daily chart is mixed as MACD is bearish, five-day moving average is below 15-day MA and falling; but stochastic is turning bullish at oversold.
Preference:
Sell below 0.9125 with targets at 0.906 and 0.9019 in extension.
Support levels:
S1 - 0.906 (Monday's low)
S2 - 0.9019 (Friday's 10-month low)
S3 - 0.8998 (April 2 low)
Alternative scenario:
Buy above 0.9125. Above 0.9125 look for further upside with 0.917 and 0.919 as targets.
Resistance levels:
R1 - 0.917
R2 - 0.919
R3 - 0.9234 (Wednesday's high)
Technical comment:
As long as the resistance at 0.9125 is not surpassed, the risk of the break below 0.906 remains high.
