Fundamental Overview:
USD/CHF is expected to consolidate with a bullish bias. USD/CHF is undermined by the weaker USD sentiment. But CHF sentiment is dented by the weaker-than-expected Switzerland September PMI of 50.4 (versus forecast 52.0). USD/CHF downside is also limited by the franc sales on soft CHF/JPY cross and dovish Swiss National Bank's monetary policy. USD/CHF upside is dented by the profit-taking on long USD positions ahead of the European Central bank's interest rate decision Thursday and U.S. nonfarm payrolls data Friday and lower U.S. Treasury yields (10-year at 2.389% versus% 2.508% late Tuesday), weaker USD sentiment on worse-than-expected drop in U.S. ISM manufacturing PMI to 56.6 in September from 59.0 in August (versus forecast 58.2), surprise 0.8% decrease in U.S. August construction spending (versus forecast for 0.6% increase), lower final Markit U.S. September manufacturing PMI of 57.5 versus preliminary reading of 57.9.
Technical Comments:
Daily chart is still positive-biased as MACD is bullish, stochastics stays elevated at overbought zone, five and 15-day moving averages are advancing.
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 0.9595 and the second target at 0.9635. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.9485. A break of this target would push the pair further downwards and one may expect the second target at 0.9455. The pivot point is at 0.9525.
Resistance levels:
0.9595
0.9635
0.9650
Support levels:
0.9485
0.9455
0.9415
The material has been provided by InstaForex Company - www.instaforex.com
