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rally approaching major resistance hurdle- Rally at risk sub-9833 Check out our new 4Q USD/CHF projections in our Join Michael for Live Weekly Strategy Webinars on USD/CHF Daily Chart
Technical Outlook: Swissie has been trading within the confines an with the advance now approaching an area of key confluence resistance 9814/33- this region is defined by the March swing low & the 200-day moving averages and converges on the median-line (blue) and basic trendline resistance off the yearly high. The advance is at risk heading into this region with near-term support eyed at the monthly open at 9680. Broader bullish invalidation rests at the confluence of the lower parallel & the 9/11 reversal-day close at 9560.
A breach above key resistance would invalidate the reversal play and likely fuel accelerated gains for the greenback with such a scenario eyeing topside resistance objectives at 9882, 9991 & the double bottom measured move at 1.0108.
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USD/CHF 240min Chart
Notes: A closer look at price action further highlights this near-term resistance zone with the 50-line converging on the monthly / weekly open at 9680. A break below this level shifts the focus towards support targets at 9647, 9604 & the 61.8% retracement / lower parallel at 9560.
Bottom line: heading into tomorrow's U.S. Non-Farm Payrolls report, the risk remains for an exhaustion high into highlighted resistance before pulling back. From a trading standpoint, I'll favor fading rallies into resistance with a drop into the lower parallel to offer more favorable long entries. Added caution is warranted heading into the release with the event likely to fuel increased volatility in the crosses.
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A summary of shows traders are net-long USDCHF- the ratio stands at +1.8 (64.3% of traders are long) Weak bearishreading Retail has remained net-long since Apr 21; price has moved 0.8% lower since then Long positions are 3.1% higher than yesterday and 23.8% higher from last week Short positions are 25.4% higher than yesterday and 28.2% higher from last week We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDCHF prices may fall. Yet traders are less net-long than yesterday and compared with last week and the recent changes in sentiment warn that the current USDCHF price trend may continue higher despite the fact traders remain net-long. See how shifts in USD/CHF retail positioning are impacting price trends-
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- Written by Michael Boutros, Currency Strategist with DailyFX
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