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Technical Analysis: USD/CHF Pullback to 0.9860 Fibonacci 38.20% Retracement

Posted by Chris Advincula on Mar 16, 2017 6:42:58 AM


(Mar 16 Thursday) The USD/CHF daily chart shows a double-top resistance 1.0340 (Dec 14) and 1.0335 (Jan 2) followed by an immediate pullback correction to 0.9860 (Jan 31) Fibonacci arc 38.20% retracement. The Fibo arc High 1.0340 (Dec 14) and Low of 0.9440 (May 2) which is a 900 point range of U.S. dollar gains versus the swiss franc on an 8-month run from May 2016 to Jan 2017.

After the November 2016 U.S. Presidential election, the dollar made an impressive 790 pip gain from the chart low of 0.9550 (Nov 8) to the high of 1.0340 (Dec 14). The sharp rise of the dollar to the 1.0340 double-top formation and resistance, met rounds of profit-taking sellers pushing the rate back to 0.9860 (Jan 31).

Once again, US dollar buying interest picks up from 0.9860 (Jan 31) to test the recent high of 1.0167 (Mar 7) (+307 pips) which displayed the post bullish sentiment and speculation of the Fed raising their interest rate.

This particular +307 pip run to 1.0167 however, shows a weak RSI rebound. The 14-day RSI (relative strength index) chart bounced from the 33 level (Jan 30) to only 59 (Mar 1) which fell to 42 today.

The relevance to the easing of the 14-day RSI from 59 to 42 showed the limited gains of the recent rebound of the spot USDCHF rate to 1.0167. Thus, the spot rate fell to 0.9975 today, following the less hawkish Fed forecast yesterday, with the return of swiss buying interest. 

If the retracement pullback continues, the 0.9850 Fibo arc (38.20%) appears to be due for a repetition. The immediate support is 0.9975. The next support levels are: 0.9920 (14 DMA Feb 6) and 0.9860 (Jan 31).

The immediate resistance levels are: 1.0010, 1.0045, 1.0090 and 1.0110 (30 DMA).


Topics: USDCHF, US Dollar, technical analysis, Forex, Swiss Francs


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