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USD/CHF Technical Analysis: The Range within the Range

USD/CHF Technical Analysis: The Range within the Range

2016-09-14 19:07:00
James Stanley, Strategist
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Talking Points:

  • USD/CHF Technical Strategy: The range continues; choppy, indecisive price action over the past week.
  • The Swissy has seen a tighter range build over the past week, within the larger, longer-term range of the past six months.
  • 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 USD/CHF after a quick run down to the support-side of the range that’s been building in the pair over the past six months. And as we noted, traders would likely want to wait for price to move to either support or resistance before acting in regards to new positions.

Since then USD/CHF has been extremely choppy, and over the past four trading days another, tighter, much more short-term range has developed that traders may want to eschew in favor of the longer-term channel formation. On the chart below, we’re looking at both of these ranges in the effort of showing why traders may want to steer more attention to the longer-term formation:

USD/CHF Technical Analysis: The Range within the Range

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

Much of the longer-term technical structure in the ‘bigger picture’ range of USD/CHF can be defined with Fibonacci levels set from the May high-low in the pair; and helping to define that May high is an even longer-term Fibonacci level of the 61.8% retracement of the 2010 high to the 2011 low in USD/CHF; coming in right at .9948 which helped to set that recent top in price action. Given the confluence of resistance in this zone, should USD/CHF rally up to this value, longer-term short positions could become attractive.

On the bullish side of the pair, the support zone from .9442-.9563 could be an interesting level to begin investigating long positions with the goal of trading range continuation. Traders can look for stops below this point of support with targets cast towards the resistance zone of the longer-term range. We look at the same range as above on the chart below, but we’ve applied applicable Fibonacci retracements to help highlight potential support and resistance around each side of the range.

USD/CHF Technical Analysis: The Range within the Range

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

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

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