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Talking Points:
- USD/CHF Technical Strategy: intermediate-term mixed, short-term, very choppy.
- After we saw bulls return in the first half of February, matters have gotten considerably messier for Swissy price action.
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In our last article, we looked at the ‘barbed wire’ that was showing on the daily Swissy chart as price action had been chopping back and forth with little respect to prior support or resistance. We had pointed out the Fibonacci level at 1.0155 as a level to watch in order to gauge directional biases; as a break-above could signal the potential for bulls to continue running prices-higher. Yesterday morning produced a quick test of this zone of resistance, at which point sellers came-in. But they weren’t able to driver for long, as ‘higher low’ developed near prior resistance in the zone around 1.0125.
Chart prepared by James Stanley
On a longer-term basis, we can see a trend-channel showing, taken from the February lows; with current price action facing resistance at the mid-line of the channel, which is confluent with the 23.6% retracement of the ‘Trump Bump’ in the pair, as well as the 38.2% retracement of the January move-lower: So, this is a critical level for USD/CHF.
Chart prepared by James Stanley
For those that want to take on long exposure in USD/CHF, an extension of the top-side move could open the door for such a scenario. This would allow price action to revisit the upper-half of that channel that’s existed since February; after which this current zone of resistance can be re-assigned as support for trend-following approaches.
--- Written by James Stanley, Analyst for DailyFX.com
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