USD/CHF Technical Analysis – Double Bottom in the Works
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- USD/CHF Technical Strategy: Flat
- Support: 0.8762 (23.6% Fib exp.), 0.8720 (double bottom?)
- Resistance: 0.8799 (38.2% Fib exp.), 0.8829 (50% Fib exp.)
The US Dollar launched a swift recovery against the Swiss Franc after completing a bullish Piercing Line candlestick pattern, as we suspected. Prices are testing resistance at 0.8799, marked by a falling trend line set from early April and the 38.2% Fibonacci expansion. Breaking above this barrier on a daily closing basis aims for the 50% level at 0.8829. Near-term support is at 0.8762, the 23.6% Fib, with a break below that eyeing the emerging double bottom at 0.8720.
Prices are too close to relevant resistance to justify a long position from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal warns against taking up the short side. With that in mind, we will continue to wait on the sidelines for the time being.
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.