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by Charalambos Pissouros

USD/CHF Stays Above an Upside Support Line

USD/CHF opened with a negative gap today, but hit support near the 0.9865 level and quickly rebounded to fill the gap, and to find resistance slightly above Friday’s high of 0.9910. Overall, the pair continues to trade above the upside support line drawn from the low of August 13th, and thus, we would consider the near-term outlook to be positive for now.

If the bulls are strong enough to clearly break above the 0.9910 barrier, then we may see them aiming for the 0.9945 zone, which is slightly above Wednesday’s peak and slightly below Thursday’s high. They may decide to take a break after hitting that area, thereby allowing the rate to correct lower. However, as long as USD/CHF would be trading above the aforementioned upside line, we would see decent chances for the bulls to take the reins again. If they do, the next positive leg may drive the rate above 0.9945, thereby confirming a forthcoming higher high on both the 4-hour and daily charts. Such a move may allow positive extensions towards the high of August 1st, at around 0.9975.

Taking a look at our short-term oscillators, we see that the RSI rebounded and just poked its nose back above 50, while the MACD, although fractionally below both its zero and trigger lines, shows signs of bottoming as well. These indicators suggest that USD/CHF may have started picking up upside speed and corroborate our view for some further near-term advances.

On the downside, we would like to see a decisive dip below 0.9853 before we start examining the case of a short-term trend reversal. Such a dip could confirm the break below the pre-discussed upside support line and may initially open the path towards an intraday swing low formed on September 5th, at 0.9818. If the slide does not end there, the next possible support area lies at around 0.9800, marginally above the low of September 4th.

USD/CHF 4-hour chart technical analysis


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