Fundamental overview:
USD/CHF is expected to trade in lower range. It is supported by the broadly stronger USD undertone and lower-than-expected Switzerland September import price index of -1.4% on-year (versus forecast -1.2%); dovish Swiss National Bank's monetary policy. It is also supported by the lower U.S. Treasury yields (10-year at 2.197% versus 2.305% late Friday) as investors pushed back expectations of the first Federal Reserve's rate increase in 2015 after Fed officials signaled a cautious approach to raising interest rates amid deteriorating global growth outlook But USD/CHF gains are tempered by the franc demand on soft EUR/CHF, GBP/CHF and CAD/CHF crosses.
Technical comments:
Daily chart mixed as MACD and stochastics are in bearish mode, but bullish-piercing candlestick pattern was completed on Tuesday.
Trading recommendations:
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 0.9385. A break of this target will move the pair further downwards to 0.9350. The pivot point stands at 0.9525. In case the price moves in the opposite direction and bounces back from the support level, then it will 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 0.9560 and the second target at 0.9600.
Resistance levels:
0.9560
0.96
0.9635
Support levels:
0.9385
0.9350
0.9315
