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Looking to Buy USD/CHF on Weakness

Looking to Buy USD/CHF on Weakness

Kristian Kerr, Sr. Currency Strategist

Talking Points

  • Cycle analysis points to broader move higher
  • Year-to-date high at .9125 now key upside pivot

To receive other reports from this author via e-mail, sign up to Kristian’s e-mail distribution list via this link.

Cycle analysis pinpointed the turn at the start of the year in USD against the European currencies. We believe there is a good chance that this turn will lead to a more important USD move higher in the weeks and months ahead. One of the main pairs that we are watching for clues, as it has a tendency to be a leader, is USD/CHF. The rate made its low for 2013 on December 27th at the 127% extension of the January to May advance and has moved steadily higher ever since. The break and recent successful re-test of the 2nd square root relationship of the 2013 low at .8985 is very constructive and points to further gains. A push through the year-to-date high at .9125 in the next few days should kick off another bout of material USD strength. Unexpected aggressive weakness below .8985 would warn that a more prolonged sideways period is due.

USD/CHF Daily Chart: January 16, 2014

RANGE_JAN_16_body_Picture_2.png, Looking to Buy USD/CHF on Weakness

Charts Created using Marketscope – Prepared by Kristian Kerr

Key Event Risks in Coming Sessions:

RANGE_JAN_16_body_Picture_1.png, Looking to Buy USD/CHF on Weakness

LEVELS TO WATCH

Resistance: .9080 (Gann), .9125 (2014 YTD High)

Support: .9000 (Fibonacci), .8925 (Fibonacci)

Strategy: Buy USD/CHF on weakness

Entry: Buy USD/CHF at .9000

Stop: 1-day close below .8925

Target: .9175

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

Are you looking for other ways to pinpoint support and resistance levels? Take our free tutorial on using Fibonacci retracements.

To contact Kristian, e-mail instructor@dailyfx.com. Follow me on Twitter at@KKerrFX.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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