Fundamental overview:
USD/CHF is expected to trade in a range. The pair is undermined by franc demand on cross trades versus major currencies. But USD/CHF downside is limited by broadly firmer dollar undertone (ICE spot dollar index last 93.00 versus 92.58 early Tuesday), negative Swiss interest rates, and threat of SNB CHF-selling intervention. However, the USD sentiment is dented by lower-than-expected U.S. January NAHB housing market index of 57 (versus forecast 58).
Technical comment:
Daily chart is mixed as MACD is in bearish mode, but stochastics is neutral.
Trading recommendations:
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 long as the price is keeping above its pivot point, a long position is recommended with the first target at 0.8840 and the second target at 0.8910. In an alternative scenario, if the price moves below its pivot points, short posisitions are recommended with the first target at 0.8550. A break of this target would push the pair further downwards and one may expect the second target at 0.8445. The pivot point is at 0.8685.
Resistance levels:
0.8840
0.8910
0.8975
Support levels:
0.8550
0.8445
0.84
