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USD/CHF Technical Analysis: Consider Small Long Positions

USD/CHF Technical Analysis: Consider Small Long Positions

Martin Essex, MSTA, Analyst

Talking Points

- USD/CHF has been in a downtrend since the start of 2017 but is threatening to break out to the upside.

- Another positive signal is a climb above the 20- and 50-day moving averages.

- If you’re looking for trading ideas, check out our Trading Guides. They’re free and updated for the first quarter of 2017. If you’re looking for ideas more short-term in nature, please check out our Speculative Sentiment Index indicator (SSI).

USD/CHF has been falling since the beginning of 2017 but in recent days has moved to, and briefly just above, the trendline marking the upper limits of the downward channel. This suggests that a break to the upside is now possible and that small long positions should be considered.

Chart 1: USD/CHF Daily Timeframe (January to April 2017)

USD/CHF Technical Analysis: Consider Small Long Positions

Chart by IG

A positive near-term outlook is also suggested by the climb in the price above the 20- and 50-day moving averages as a more positive trend has developed over the last couple of weeks.

Chart 2: USD/CHF One-Hour Timeframe (March 22 to April 11, 2017)

USD/CHF Technical Analysis: Consider Small Long Positions

Chart by IG

If a sustained break does occur, a plausible target could be the January 3 high close to 1.0330, a level also reached on December 15 last year and on November 27, 2015. On the downside, the 50- and 20-day moving averages provide support at 1.0037 and 0.9991 respectively, while parity itself could provide psychological support. A stop could therefore be placed around 0.9950 to prevent further losses if those supports fail to hold.

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at martin.essex@ig.com

Follow Martin on Twitter @MartinSEssex

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