Overview:
USD/CHF is expected to consolidate as markets await the Federal Reserve interest rate announcement. It is supported by the positive USD sentiment, lower-than-expected Switzerland May import price index (came in -0.8% on-year versus -0.6% forecast) and dovish Swiss National Bank's monetary policy stance. But USD/CHF upside is limited by the franc demand on buoyant CHF/JPY cross and caution before SNB's interest rate announcement on Thursday. Daily chart is mixed as MACD and stochastics are in bearish mode, but five-day moving average is meandering sideways above advancing 15-day MA.
Trading recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 0.8955. A breach of this target will move the pair further downwards to 0.8940. The pivot point stands at 0.90. In case the price moves in the opposite direction and bounces back from the support level, and then it moves above its pivot point. It is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 0.9015 and the second target at 0.9035.
Resistance levels:
0.9015
0.9035
0.9060
Support levels:
0.8955
0.8940
0.89
