FX.co ★ Technical analysis of USD/CHF for Sep 30, 2014

Fundamental Overview:

USD/CHF is expected to consolidate with a bullish bias after hitting a 14-month high 0.9532 on Monday. It is supported by the positive USD sentiment, contagion from weak EUR on CHF and dovish Swiss National Bank's monetary policy. USD/CHF is also weighed by the lower U.S. Treasury yields (10-year at 2.479% versus% 2.535 late Friday), surprise 1.0% on-month drop in U.S. pending home sales index to 104.7 in August (versus forecast for no change), positive dollar sentiment (ICE spot dollar index hit four-year-high 85.798 Monday, last at 85.601) on relative outperformance of the U.S. economy versus other major economies; stronger-than-expected rise in Dallas Fed Business Activity Index to 10.8 in September from 7.1 in August (versus forecast 9.0); as-expected 0.5% on-month increase in U.S. August consumer spending and 0.3% rise in personal income.

Technical Comments:
Daily chart is positive-biased as MACD is bullish, stochastics stays elevated at overbought zone; five and 15-day moving averages are advancing.

Trading recommendations:

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 0.9620 and the second target at 0.9650. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.9485. A break of this target would push the pair further downwards and one may expect the second target at 0.9455. The pivot point is at 0.9530.

Resistance levels:
0.9620
0.9650
0.9685

Support levels:
0.9485
0.9455
0.9415