Forex: USD/CHF Technical Analysis – Franc Pushes to 2-Year High
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- USD/CHF Technical Strategy: Flat
- Support: 0.8705 (50% Fib exp.), 0.8660 (61.8% Fib exp.)
- Resistance: 0.8776-50 (Feb 28 low, 38.2% Fib exp.), 0.8838 (trend line)
Opting against a long USD/CHF position yesterday proved prudent as the Swiss Franc pushed to the highest level in over two years against the US Dollar. A break of support at 0.8450, the 38.2% Fibonacci expansion, has exposed the 50% Fib at 0.8705. Alternatively, a reversal above the February 28 low at 0.8776 targets falling trend line resistance set from late January, now at 0.8838.
A short position from current levels targeting 0.8705 does not seem attractive. The entire trading range in question is 45 pips, whereas 20-day ATR shows a reading of 52. That means our preferred strategy of using a stop-loss activated on a daily closing basis can unduly skew risk/reward in an adverse way. With that in mind, we will pass on this setup and wait for something more palatable to emerge.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.