USD/CHF Technical Analysis: New Two-Month High Furthers Bullish Structure

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Talking Points:

• USD/CHF Technical Strategy: Flat.
• Swissy continues to show bullish near-term structure, ascending to a fresh ‘higher high’ earlier in today’s trading session.
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In our last article, we looked at old resistance becoming new higher-low support in USD/CHF. The fact that this took place around the key Fibonacci level of .9681 made it all the more compelling, as this is the 50% Fibonacci retracement of the 2008 high to the 2011 low in the pair. This is also a level that’s seen considerable price action in the nearly five years since it’s completion; so it rightfully remains as a key area for traders to work with in the current price vicinity on USD/CHF.

We’re seeing another instance of old resistance becoming an interesting level at .9800, as this is the 76.4% retracement of the prior major move, taking the January high the February low in the pair. This is also the level that stalled-out the April advance in the pair, as the prior swing high was less than five pips away from this Fibonacci level.

For traders looking to re-load on the long-side of the move, the major psychological level of .9750 could be particularly interesting. This price caught a quick inflection yesterday morning, and continued support north of this level could highlight the potential for top-side continuation. Traders looking to get long can wait for support to build in this region between .9750-.9800 before triggering the top-side position.

For traders looking to implement a short-side thesis in the pair, waiting for a break of the .9660 level could open the door for bearish positions as this key support level giving way could indicate the potential for continued bearishness in the pair.

Created with Marketscope/Trading Station II; prepared by James Stanley

--- Written by James Stanley, Analyst for DailyFX.com

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