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Technical analysis of USD/CHF for February 05, 2015

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Fundamental overview:
USD/CHF is expected to trade with risks skewed higher. It is supported by the improved dollar sentiment (ICE spot dollar index last 94.57 versus 93.77 early Wednesday) on stronger than expected U.S. January ISM non-manufacturing PMI of 56.7 (versus forecast 56.1). At the same time, investors remained upbeat on the U.S. labour market conditions ahead of the Friday's non-farm payrolls report despite a fewer than expected 213,000 increase in ADP U.S. private sector jobs in January (versus forecast 240,000). The pair is also boosted by the negative Swiss interest rates and the threat of the SNB CHF-selling intervention. But the USD/CHF gains are tempered by the franc demand on the soft EUR/CHF and CAD/CHF crosses.

Technical comment:
The daily chart is positive-biased as the MACD and stochastics is in bullish mode; five-day moving average above 15-day moving average and is advancing, although instraday-range pattern was completed on Wednesday.

Trading recommendations:
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 0.9160. A break of this target will move the pair further downward to 0.9075. The pivot point stands at 0.9290. 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 0.9365 and the second target at 0.9435.

Resistance levels:
0.9365
0.9435
0.9465

Support levels:
0.9160
0.9075
0.8985

Uitgevoerd door, Analytische expert
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