Overview:
USD/CHF is expected to consolidate with bearish bias as markets await U.S. non-farm payrolls report. CHF sentiment is boosted by rise in Switzerland consumer sentiment index to plus 2 in the three months through January from minus 5 in the previous quarter. USD/CHF is also undermined by the franc demand on buoyant CHF/JPY cross and weaker dollar sentiment. But USD/CHF downside is limited by reduced safe-haven appeal of CHF amid improved investor risk appetite, franc sales on buoyant EUR/CHF cross and positions adjustment before weekend. Daily chart is negative-biased as MACD is in bearish mode, stochastics is turning bearish, bearish outside-day-range pattern was completed on Thursday.
Trading recommendation:
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 far as the price is above its pivot point, a long position is recommended with the first target at 0.8965 and the second target at 0.8935. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.906. A breach of this target will push the pair further downwards and one may expect the second target at 0.908. The pivot point is at 0.9025.
Resistance levels:
0.906
0.908
0.91
Support levels:
0.8965
0.8935
0.89
