USD/CHF is expected to trade in a higher range. Underpinned by broadly firmer USD undertone (ICE spot dollar index last at 87.96 versus 87.60 early Monday) on relative better U.S. economic picture and diverging U.S. monetary policy stance versus other major economies, contagion from weak EUR on CHF and dovish Swiss National Bank’s monetary policy.
Daily chart is mixed as MACD and stochastics are bearish, but the bullish-piercing candlestick pattern was completed on Monday.
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 0.9555. A break of this target will move the pair further downwards to 0.9515. The pivot point stands at 0.9635. In case the price moves in the opposite direction and bounces back from the support level, then it will move above its pivot point. It is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 0.9670 and the second target at 0.97.
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