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USD/CHF Technical Analysis: Shy of the ‘Big’ Resistance Level

USD/CHF Technical Analysis: Shy of the ‘Big’ Resistance Level

2016-10-19 18:15:00
James Stanley, Strategist
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Talking Points:

  • USD/CHF Technical Strategy: Longer-term range, short-term price action crawling-higher towards resistance of ‘bigger picture’ range.
  • Price action is currently resisting around the .9900-handle; but 100 pips above current price offers a more well-tested resistance zone.
  • If you’re looking for trading ideas, check out our Trading Guides.

In our last article, we looked at the well-heeled zone of resistance in USD/CHF that’s offered two aggressively-bearish reversals over the past five months. Towards the end of May and then July, price action saw a rejection off of the .9949 level, which is the 61.8% Fibonacci retracement of the major move from 2010-2011 in USD/CHF. In our last article, we asked if the Triple Top formation was near; and should price action move up to find resistance at this level the formation can come into play.

At this point, near-term resistance is showing about ~40 pips below this level of long-term resistance, and the area around .9910 has held fairly well for the past week. But on the other side of price action has also been higher-lows (shown with the blue trend-line on the below chart); indicating that bulls haven’t yet completely relented.

While this can appear attractive to range-traders looking to jump the entry a bit early under the precipice that stops are going above parity anyways – these traders would likely want to take heed of the higher-lows. The fairly well-balanced price action over the past week in USD/CHF would indicate that the pair could certainly break higher, and this could wipe out stops of those early range entries.

With an ECB meeting on the radar for tomorrow, more attractive would be looking for a spike of resistance in or around this zone between .9949-1.0000. Should sellers respond to these higher-short term values, this could be ample opportunity to strike on the range-continuation setup. An early entry in a range-bound pair in front of major headline risk can be a daunting prospect.

USD/CHF Technical Analysis: Shy of the ‘Big’ Resistance Level

Chart prepared by James Stanley

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

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