USD/CHF is expected to trade in a lower range which is undermined by broadly weaker dollar undertone (ICE spot dollar index last at 87.59 versus 87.77 early Friday) as U.S. Treasury yields slipped (10-year at 2.320% versus 2.345% late Thursday) after U.S. import price index dropped 1.3% on-month in October (versus forecast minus 1.2%) for the largest monthly decline in more than two years, while University of Michigan survey showed inflation expectations covering the next five to 10 years fell from 2.8% to 2.6%, the lowest level since 2009, franc demand on buoyant CHF/JPY cross and franc demand on soft GBP/CHF and EUR/CHF crosses (latter last at 1.2012, just above the critical 1.2000 level). But USD/CHF losses are tempered by the dovish Swiss National Bank’s monetary policy.
Daily chart is negative-biased as bearish outside-day-range pattern was completed on Friday, MACD and stochastics are bearish.
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price is keeping above its pivot point, a long position is recommended with the first target at 0.9675 and the second target at 0.970. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.9580. A break of this target would push the pair further downwards and one may expect the second target at 0.9540. The pivot point is at 0.9610.
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