FX.co ★ Technical analysis of USD/CHF for June 03, 2014

Overview:

USD/CHF is expected to consolidate with bearish bias after hitting near-four-month high at 0.8995 on Monday. CHF sentiment is dented by the worse-than-expected drop in Switzerland PMI to 52.5 in May from 55.8 in April (versus 54.8 forecast). USD/CHF is also supported by the broadly stronger USD undertone, franc sales on buoyant EUR/CHF cross and dovish Swiss National Bank's monetary policy stance. But USD/CHF gains are tempered by the franc demand on buoyant CHF/JPY cross. Daily chart is positive-biased as MACD is bullish, stochastics stays elevated at overbought zone, five and 15-day moving averages are advancing. 

Trading recommendation:

The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 0.8935. A breach of this target will move the pair further downwards to 0.8920. The pivot point stands at 0.8995. In case the price moves in the opposite direction and bounces back from the support level, and then it moves above its pivot point. It is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 0.9010 and the second target at 0.9035.

Resistance levels:    
0.9010 
0.9035
0.9065

Support levels:
0.8935
0.8920
0.8885