Overview:
USD/CHF is consolidating with bearish bias after hitting seven-month low of 0.9145 on Monday. The rate is weighed by weaker USD sentiment; broadly softer demand for safe-haven USD as investor risk tolerance improves. Markets are steady as cliff talks move in right direction with the gap on tax cuts seemingly closing between the Obama and Boehner. That news lifted equities into the NY close, and the Nikkei followed up with a 1% gain. The corrective recovery from Monday's low at 0.9145 is destined to be capped beneath 0.9240. Last week's lowest close in eight months highlights the dominant USD bear tone and the 0.9145 low will remain vulnerable while resistance at 0.9240 caps. A down wave equality target at 0.9112 and the 0.9043 intra-wave higher from early May will be targeted on a break below 0.9145.
Preference:
Sell below 0.9205 with targets 0.9135 and 0.911 in extension.
Support Levels:
S1 - 0.914 (Monday's low)
S2 - 0.911
S2 - 0.9075
Alternative scenario:
Buy above 0.9205. Above 0.9205 look for further upside with 0.924 and 0.9275 as targets.
Resistance Levels:
R1 - 0.9247 (Friday's high)
R2 - 0.9275 (Thursday's high)
R3 - 0.93
Technical Comment:
The pair remains within a bearish channel as the RSI is badly directed. Daily chart is negative-biased as MACD and stochastic are bearish, although latter is at oversold; five- & 15-day moving averages are falling.