USD/CHF

USD/CHF: the pair is consolidating

Current trend, The USD/CHF pair is consolidating around the local lows since October 17, renewed on November 20. On Thursday, the US markets were closed to Thanksgiving Day, so investors were focused on European news and Brexit situation.

Yesterday, CHF was under pressure of poor Q3 Swiss Industrial Production data, which fell by 7.7% QoQ after rising by 7.6% QoQ in the previous period. Also, the growth slowed from +8.9% YoY to +1.4% YoY.

As for Brexit, the day before, the head of the European Council, Donald Tusk, announced a principled political agreement of the parties with the text of the Brexit treaty. Now it must be approved separately by all 27 EU member states, which is expected on November 25th. However, according to Margaritis Schinas, Commission's DG Communication representative, the controversial issues concerning fishing and Gibraltar have not yet been agreed.

Support and resistance

On the daily chart, Bollinger bands are steadily declining. The price range is actively expanding from below, letting the “bears” renew local lows. MACD indicator is falling, keeping a moderate sell signal (the histogram is below the signal line), and is trying to consolidate below the zero line. Stochastic is trying to grow, rebounded from Tuesday’s lows.

It is better to wait until the trading signals are clear before opening new positions.

Resistance levels: 0.9957, 0.9976, 1.0000, 1.0027.

Support levels: 0.9926, 0.9907, 0.9889.

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Trading tips

Long positions can be opened after the breakout of the levels of 0.9957–0.9976 with the target at 1.0000 or 1.0027. Stop loss is 0.9935–0.9950.

Short positions can be opened after the breakdown of the levels of 0.9926–0.9920 with the target of 0.9889 or 0.9870. Stop loss is 0.9940–0.9950.

Implementation period: 2–3 days.

 

Scenario

Timeframe Intraday
Recommendation BUY STOP
Entry Point 0.9960, 0.9980
Take Profit 1.0000, 1.0027
Stop Loss 0.9935, 0.9950
Key Levels 0.9889, 0.9907, 0.9926, 0.9957, 0.9976, 1.0000, 1.0027

 

Alternative scenario

 

Recommendation SELL STOP
Entry Point 0.9920, 0.9915
Take Profit 0.9889, 0.9870
Stop Loss 0.9940, 0.9950
Key Levels 0.9889, 0.9907, 0.9926, 0.9957, 0.9976, 1.0000, 1.0027

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