USD/CHF Price Outlook: Risk of Larger Correction If This Level Breaks

The Swiss Franc has been underneath vigour given early Feb with USD/CHF climbing to two-month highs forward of yesterday’s FOMC seductiveness rate decision. The successive annulment has damaged subsequent a weekly opening-range lows and we’re looking for a mangle of near-term uptrend support to advise that a some-more poignant depletion high might be in place.

USD/CHF Daily Price Chart

USD/CHF Price Chart - Daily Timeframe

Technical Outlook: USD/CHF has been trade within a proportions of a extended forward pitchfork formation fluctuating off a 2015 2017 highs with an embedded channel arrangement off a Dec highs (red) stability to oversee cost action. The span incited only forward of channel insurgency this week with a pullback now contrast support during a median-line of a broader structure. Note that daily RSI unsuccessful to crack above a 60-threshold with a tentative support trigger now in view.

A tighten subsequent a Mar open during 9445 would be indispensable to advise that a some-more poignant high is in place with such a unfolding targeting a 2017 lows during 9420 and a monthly opening range low during 9338. A topside crack of this slope would be indispensable to keep a long-bias in play targeting 9614 and a 100 200 DMAs during 9550/61.

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USD/CHF 240min Price Chart

USD/CHF Price Chart - 240min Timeframe

Notes: A closer demeanour during Swissie cost movement shows a span trade within a near-term descending pitchfork arrangement fluctuating off a Feb lows with cost now contrast a connection of a 61.8% line and a Feb highs during 9470. Look for initial insurgency during a weekly open during 9524 with a bearish cancellation turn set to a weekly high during 9569. The reduce together rests with a Monthly open during 9445 and a mangle subsequent this turn is indispensable to fuel a subsequent leg reduce targeting 9424, 9378 and 9333.

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Bottom line: The broader allege off a Feb low is during risk near-term while subsequent simple channel resistance. From a trade standpoint, I’ll preference offered rallies while subsequent a weekly open with a mangle subsequent this arrangement indispensable to countenance a reversal. Look for a insurgency reason during 60 in intraday RSI with a mangle sub-40 to offer serve self-assurance on a change in a movement profile.

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USD/CHF IG Client Sentiment

USD/CHF Client Sentiment

  • A outline of IG Client Sentiment shows traders are net-long USDCHF- a ratio stands during +2.33 (69.9% of traders are long) –bearishreading
  • Traders have remained net-long given Nov 17th; cost has changed 5.0% reduce given then
  • Long positions are 2.2% reduce than yesterday and 16.9% reduce from final week
  • Short positions are8.9% aloft than yesterday and 9.8% aloft from final week
  • We typically take a contrarian perspective to throng sentiment, and a fact traders are net-long suggests USDCHF prices might continue to fall. Yet traders are reduction net-long than yesterday and compared with final week. Recent changes in view advise that a stream USDCHF cost trend might shortly retreat aloft notwithstanding a fact traders sojourn net-long.

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– Written by Michael Boutros, Currency Strategist with DailyFX

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