USD/CHF is expected to trade in a lower range. It is undermined by weaker dollar sentiment (ICE spot dollar index last 96.93 versus 97.83 aearly Monday) as investors continue to unwind long-USD positions after the Federal Reserve last week downgraded its forecasts for growth and inflation and lowered its projected path for rate rises. On Manday, Fed Vice-Chairman Fischer said the US central bank remains on track to raise short-term rates this year. But warned future rate increases are unlikely to move steadily upwards as they did in past cycles. But USD/CHF losses are tempered by the negative Swiss interest rates, threat of Swiss National Bank CHF-selling intervention.
The daily chart is negative-biased as the MACD and stochastics are bearish, five-day moving average is below 15-day moving average and is declining.
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below the pivot point. Short positions are recommended with the first target at 0.9495. A break of that target will move the pair further downwards to 0.9435. The pivot point stands at 0.9650. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, a long position is recommended with the first target at 0.9720 and the second target at 0.9820.
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