Technical Analysis: USD/CHF

By TraderVox.com

Tradervox.com (Dublin) – The USD/CHF has continued to trade in a narrow range as risk returns to the market. The pair shed over a cent last week where it closed at 0.9438, and the increased Fed stimulus speculation is weakening the dollar further against the franc. The franc has edged upwards as Germany has confirmed its participation in the bailout fund. The technical levels that we are looking at as we close the week are inclined to downward trend.

From top, we are looking at a resistance level at 1.0136 which is followed by the line at 1.0066; this line was breached for the last time in 2010. The parity line has been firm throughout the year; this paves way for the line at 0.9915. The resistance line at 0.9719 has held firm; however, the resistance at 0.9584 has been weak as the pair has breached in the previous week. The resistance line at 0.9510 switched to a supportive role last week as the dollar increased.

The pair started the week with support at 0.9420 which is set to be broken as the dollar weakens. There is strong support at 0.9317 which has been firm since May. The Fed decision may push the cross below this line this week. Support lines at 0.9250 and 0.9182 are strong and they may hold firm this week. Other support lines in focus are 0.9093, 0.9016, 0.90, and 0.8918.

The USD/CHF pair continued to trade lower on Wednesday as the support line at 0.9420 was tested. The support line at 0.94 is a 200-day SMA and a break below this line will expose the 0.93 support line. At this level the pair will start to rise in line with trendline at 0.8930. The Fed policy is a key announcement that will determine dollar performance across the board. The franc is set to decline further against the euro as German Court decided to allow the formation of ESM.

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