Fundamental overview:
USD/CHF is expected to trade with bullish bias. It is supported by the broadly firmer dollar undertone (ICE spot dollar index last 97.90 versus 97.40 early Monday) and positive risk appetite (VIX fear gauge eased 4.25% to 13.3; S&P 500 closed up 0.92% at 2,100.4 overnight) as the European and U.S. stocks reacted positively to the People's Bank of China's cut 100 basis points in the reserve requirement ratio for all banks. The pair is also boosted by the negative Swiss interest rates and the threat of the Swiss National Bank to carry out CHF-selling intervention. But USD/CHF gains are tempered by the franc demand on the soft EUR/CHF cross.
Technical comment:
The daily chart is still negative-biased as the MACD and stochastics are bearish, although the latter one is at oversold levels. Five-day moving average is below 15-day moving average and is declining.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. As long as the price holds above its pivot point, long positions are recommended with the first target at 0.9650 and the second target at 0.9710. In the alternative scenario, in case the price moves below its pivot points, short positions are recommended with the first target at 0.7445. A break of this target is likely to push the pair further downwards, and one may expect the second target at 0.7370. The pivot point is at 0.9490.
Resistance levels:
0.9650
0.9710
0.9765
Support levels:
0.9445
0.9370
0.9335
