Fundamental overview: USD/CHF is expected to consolidate with soft tone. It is undermined by weaker dollar sentiment(ICE spot dollar index last 95.37 versus 95.92 early Wednesday) after the ADP employment report showed fewer-than-expected 201,000 increase in US private sector jobs in May (versus forecast +215,000). US May ISM non-manufacturing PMI came weaker than expected at 55.7 (versus forecast 57.1). USD/CHF downside is limited by franc sales on buoyant EUR/CHF cross, negative Swiss interest rates, and the threat of the Swiss National Bank CHF-selling intervention.
Technical comment: The daily chart is negative as stochastics is falling from overbought levels. Positive MACD histogram bars are contracting. Bearish parabolic stop-and-reverse signal was hit on Wednesday.
Trading recommendations:
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 0.9250. A break of that target will move the pair further downwards to 0.9195. The pivot point stands at 0.9325. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 0.9375 and the second target at 0.9430.
Resistance levels: 0.9375 0.9430 0.9480
Support levels: 0.9250 0.9195 0.9150
