The USD/CHF has been moving in a close range all week long after on Friday it touched fresh new highs for the period after November 2010. On Monday we tried to push above those highs, but we failed to do so and we finished the session around the lows – at 0.9761. On Tuesday the bulls took the initiative from the bears and propelled the currency pair in another attempt at the highs. The attempt failed again and this time we were even unable to break the Monday highs. We managed, however, to push above the 25-period and the 50-period moving averages once more after moving below them in the previous session. The gains we made in the early hours of Tuesday quickly evaporated when renewed pressure from the bears sent the USD/CHF to rates of 0.9750. Wednesday did not bring us many surprises as the same scenario from the previous two days repeated. The bulls tried to push the currency pair above its previous high and failed again. Then the bears took hold and closed the USD/CHF around the lows for the day. Today we are witnessing another push on the upside, which, again, stopped before we could reach the highs of the previous session. The dollar is currently changing hands at 0.9795 francs, slightly above the 25-period moving average and slightly below its 50-period peer. The bears continue to show strength around the highs, but they are not so strong as to break the support at the 0.9750 level. Technically speaking, the USDCHF seems to be entering in a triangle formation, which might be seen as an indication of a trend continuation. On the other hand, the 25-period and the 50-period moving averages are entering in a death cross formation, which is seen by many technicians as a trend reversal signal. Support in the currency pair is provided by the key 0.975 level, while resistance stands at the highs we reached last week – around 0.985. Oscillators are in mid-range with the relative strength index at 52 and the stochastic at 33. The MACD has just pushed below the key 0 level, but it is still moving very close to it. On the economic front, we saw the ZEW economic expectations figure come at –42.5 on Wednesday, slightly better than the –43.4 reading for the previous month. Today the trade balance numbers were announced, coming at 2.25B versus the 2.21B reading economists were projecting. At the same time the June figures were revised on the upside – from 2.48B to 2.52B.
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.