Talking Points

  • USDCHF testing critical resistance confluence at the 2016 open
  • Weekly opening range set above 100DMA
  • Updated targets & invalidation levels


USD/CHF Rebound Stalls at 2016 Open- Bearish Invalidation 1.0072

Chart Created Using FXCM Marketscope 2.0

Technical Outlook: USDCHF tested a key near-term resistance confluence yesterday at 1.0028/31. This region is defined by the yearly open, the 61.8% retracement of the 2016 range, former trendline support extending off the August low and the operative upper media-line parallel extending off the January high. The immediate long-bias is at risk while below this threshold with a break below the 100-day moving average at 9952 shifting the focus to the downside targeting 9848 & the 200DMA at 9758. A breach higher targets resistance & our bearish invalidation level at 1.0062/72 where the 61.8% extension of the advance off the yearly low converges on the 2/4 swing high.

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USDCHF 30min

USD/CHF Rebound Stalls at 2016 Open- Bearish Invalidation 1.0072

Notes: The weekly opening range is taking shape just above 100-day moving average with the range highs extending into the 61.8% retracement at 1.0029. We’re generally looking for a turn from nearby ressitance with a break of the weekly lows targeting subsquent support targets at 9893 & 9848/51.

A breach above 1.1062/72 invalidates the bearish outlook with such a scenario targeting long scalps into the 76.4% retracement at 1.0115, the 100% extension at 1.0193 and the 2016 high-day close at 1.0225. A quarter of the daily average true range yields profit targets of 26-29 pips per scalp. Caution is warranted heading into the close of the week with U.S. Non-Farm Payrolls on Friday likely to fuel added volatility in the USD crosses.

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Relevant Data Releases

USD/CHF Rebound Stalls at 2016 Open- Bearish Invalidation 1.0072

Other Setups in Play:

---Written by Michael Boutros, Currency Strategist with DailyFX

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