FX.co ★ USD/CHF: Rebound

Overview:
USD/CHF continues to range-trade. The rate is undermined by spillover from the euro strength on the franc. But USD/CHF downside is limited by CHF-funded carry trades amid increased investor risk appetite. Daily chart is mixed as MACD is bearish, five-day moving average is below 15-day MA and falling; but stochastic is bullish at oversold. Last week's low at 0.9023 has found some protection at 0.9056, and the rally is looking to retest resistance at 0.9118. However, a fresh wave of USD bull pressure is required to force a break above 0.9118 that in turn would create additional room to the 0.917 resistance area. But as the broader bear wave from the July 2012 peak at 0.9972 was upgraded as a result of last week's weakness, the Feb. 1 ten-month low at 0.9023 remains vulnerable. Loss of 0.9023 would expose the 2012 low at 0.8931.
Preference:
Buy above 0.905 with targets at 0.917 and 0.9205 in extension.
Resistance levels:
R1 - 0.917
R2 - 0.9205
R3 - 0.9234 (Jan. 30 high), then 0.9270 (Jan. 29 high) and 0.9292 (Jan. 28 high).
Alternative scenario:
Sell below 0.905. Below 0.905 look for further downside with 0.9019 and 0.898 as targets.
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 RSI broke above a declining trendline.