FX.co ★ Technical analysis of USD/CHF for October 21, 2016

Overview:

• The USD/CHF pair broke resistance, which turned into strong support at 0.9884. Right now, the pair is trading above this level. It is likely to trade in a higher range as long as it remains above the support (0.9884), which is expected to act as a major support today. Therefore, there is a possibility that the USD/CHF pair will move upwards and the structure does not look corrective. The trend is still above the 100 EMA for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside. From this point of view, the first resistance level is seen at 0.9962 followed by 1.0035, while daily support 1 is seen at 0.9884. According to the previous events, the USD/CHF pair is still moving between the levels of 0.9884 and 1.0035. Consequently, buy above the level of 1.0035 with the first target at 0.9962 so as to test the daily resistance 1 and further to 1.0035. Besides, the level of 1.0035 is a good place to take profit because it will form a new double top (161.8% Fibonacci retracement). On the contrary, in case a reversal takes place and the USD/CHF pair breaks through the support level of 0.9884, a further decline to 0.9780 can occur, which would indicate a bearish market. Overall, we still prefer the bullish scenario, which suggests that the pair will stay above the zone of 0.9884 today.