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USD/CHF Technical Analysis: Fibonacci Resistance at Four-Month Highs

USD/CHF Technical Analysis: Fibonacci Resistance at Four-Month Highs

2017-10-23 17:30:00
James Stanley, Strategist
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Talking Points:

- USD/CHF has broken above a key level of resistance around .9770 as the pair trades at four-month highs.

- USD-strength has been a resilient theme thus far in Q4, and if this is something that continues, the topside of USD/CHF can remain as attractive in the near-term.

- Want to see the DailyFX Q4 Forecast on USD? Click here for full access.

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Swissy is trading higher on the day after breaking out to fresh four-month highs last week. In our last article, we looked at the level of .9770 showing back-up as resistance after sellers came-in at .9837. The level of .9770 is the 38.2% Fibonacci retracement of the December 2016- September 2017 major move. Perhaps more importantly than any theoretical prognostications is the fact that this level functioned as resistance on multiple occasions over the past four months, rebuking upward advances in both June and August.

USD/CHF Daily: Fresh Four-Month Highs After Fibonacci Resistance at .9770 Gives Way

USD/CHF Technical Analysis: Fibonacci Resistance at Four-Month Highs

Chart prepared by James Stanley

Prices have rallied up to find resistance at another retracement from that same study, with the 50% level at .9880 currently helping to set near-term highs. This denotes the prospect of further bullish continuation, and a top-side breech of that level opens the door for bullish strategies targeting a re-test of parity (which, perhaps coincidentally, is 11 pips away from the 61.8% retracement of this same study).

USD/CHF Four-Hour: Fibonacci Resistance at .9880 After Double-Top Breakout

USD/CHF Technical Analysis: Fibonacci Resistance at Four-Month Highs

Chart prepared by James Stanley

This can open the door to a couple of different plays in the pair. With prices finding resistance on the under-side of a 50% Fibonacci retracement, buyers will likely want to try to avoid chasing the move for fear of getting caught on a top. Rather, traders can look for support to show-up at that area of prior resistance, around .9770, in the effort of trading bullish continuation.

Alternatively, if a higher-low support test does not show up, traders can look for the next area of resistance to come in around the parity figure. This is a huge psychological level on the pair, and it’s very close to the 61.8% retracement of the same move that’s helping to set current resistance. A visit towards parity opens the door for higher-low support to show around current resistance, and this can be attractive in the aim of trading bullish continuation in USD/CHF.

USD/CHF Four-Hour: A Large Zone of Resistance Looms Above (around parity)

USD/CHF Technical Analysis: Fibonacci Resistance at Four-Month Highs

Chart prepared by James Stanley

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

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