Overview:
USD/CHF continues to range-trade. The rate is supported by CHF-funded carry trades amid improved investor risk sentiment. But USD/CHF gains tempered by CHF demand on retreating EUR/CHF cross. Daily chart is mixed as MACD is bullish, but stochastics turned bearish at overbought; inside-day-range pattern was completed on Monday. Consolidation from last Friday's three-month high at 0.9389 risks further USD weakness towards 0.9215. Weakness during Tuesday's Asian session completed a bear pennant continuation pattern on the 60-minute chart, although the bear wave is considered corrective in nature. Keeping support at 0.9265 intact would prompt a strong rally back to 0.9347 and last Friday's 0.9389 high, and broader-term uptrend targets at 0.941 and the previous lower reaction high at 0.9513 would then be opened. Only movement below 0.926 would concern USD bulls.
Preference:
Sell below 0.9345 with targets at 0.926 and 0.9215 in extension.
Support levels:
S1 - 0.926
S2 - 0.9215
S3 - 0.9175
Alternative scenario:
Buy above 0.9345. Above 0.9345 look for further upside with 0.939 and 0.941 as targets.
Resistance levels:
R1 - 0.9389 (Friday's high)
R2 - 0.941
R3 - 0.9433 (200-day moving average)
Technical comment:
The RSI is bearish and calls for further downside.