Overview:
USD/CH continues to range-trade. The rate is supported by contagion from the weak euro on the franc. But USD/CHF upside is limited by unwinding of CHF-funded carry trades amid decreased risk tolerance. Daily chart is mixed as MACD bearish; but stochastic is bullish at oversold. Wednesday's high at 0.9150 has become pivotal resistance for the near term, and a test of the intra-wave higher low at 0.905 is expected. The broader bear wave from the July 2012 peak at 0.9972 was upgraded as a result of last week's weakness, and the Feb. 1 ten-month low at 0.9023 is also vulnerable. A fresh wave of USD bull pressure is required to force a break above 0.9150, opening the 0.9195/0.9210 resistance area.
Preference:
Buy above 0.905 with 0.9125 and 0.9149 in sight.
Resistance levels:
R1 - 0.9125
R2 - 0.9149 (Wednesday's high)
R3 - 0.9195
Alternative scenario:
Sell below 0.905. The downside penetration of 0.905 will call for 0.9019 and 0.897.
Support levels:
S1 - 0.9019 (Friday's 10-month low)
S2 - 0.8998 (April 2 low)
S3 - 0.8927 (Feb. 24 low).
Technical comment:
The pair stands above its support and remains on the upside as the RSI is turning up.