Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
USD/CHF Technical Analysis: Lower-High Caution for Longs

USD/CHF Technical Analysis: Lower-High Caution for Longs

James Stanley, Senior Strategist

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

  • USD/CHF Technical Strategy: Tracking USD-trends, near-term price action is messy, longer-term clinging to bullish posture.
  • USD weakness has built-in a series of short-term lower-highs in Swissy, and traders looking to get long will likely want to wait for support to show before triggering.
  • SSI - If you’re looking for trading ideas, check out our Trading Guides. And if you want something more short-term in nature, check out our SSI indicator.

In our last article, we looked at the brutal reversal of the prior up-trend in USD/CHF as a significant bout of weakness in the Greenback drove the pair lower. But as we also mentioned – given that longer-term bullish posture in the Dollar and perhaps more importantly, USD/CHF, should price action develop a higher-low north of the prior swing-low, the door could be opened for top-side plays. This happened last week…

The US Dollar put in a vigorous reversal around the release of Non-Farm Payrolls in the United States, and this strength carried USD/CHF higher into a prior batch of support. This prior chunk of support is just shy of a key Fibonacci level at .9847; which is the 38.2% retracement of the May 2015 low to the November 2015 high. Since running into that resistance, the Swissy has continued to face pressure and this highlights a ‘lower-high’ in USD/CHF that should, at the very least, moderate traders’ bullishness towards the setup.

But longer-term, we still have ‘higher-lows’ showing. The swing low in May bounced off of a key Fibonacci level at .9441, and the swing-low in June bounced off another Fibonacci level a bit higher on the chart at .9550. These longer-term ‘higher-lows’ denote the potential for USD/CHF to remain an attractive candidate for long-USD exposure.

So because of this longer-term bullish bias coupled with this near-term bout of weakness after a resistance inflection, traders could look for price action to move down to support before triggering bullish setups with the aim of taking the Dollar higher. A level of interest for such an approach is showing at the .9700 handle, as this is the 50% Fibonacci retracement of the same major move we’d looked at earlier. And should price break below the .9700-handle, traders can look a bit deeper to the most recent swing low around .9632 for that support. If price action breaks below the .9500-handle, bullish stances should be moderated as evidence of longer-term strength in the pair would be far less prominent.

USD/CHF Technical Analysis: Lower-High Caution for Longs

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

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

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

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

DISCLOSURES