CHF Technical Analysis

USD/CHF
Weekly

-USD/CHF followed through on last week’s key reversal. The low is right at a 5 year trendline. In fact, this trendline crosses the lows from May 2014 and May 2015. As noted over at the daily section, “this week’s low is about as far as USD/CHF can go if price action from the November high is a wedge. Failure to hold here would risk weakness to the May 2015 low near .9070. Exceeding wedge resistance (currently mid-.9800s) would bolster bullish prospects.”
-Some extremely long term technical considerations are worthy of note when looking at USD/CHF.

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USD/CHF : 238 pips price movement by Brexit Referendum Final Results

H4 intra-day price is breaking 200 SMA t above for the bullish breakout: the price is testing 15-day high at 0.9775 for the bullish reversal to be continuing.

Daily price is on secondary correction within the primary bullish condition: the price is breaking Senkou Span line of Ichimoku indicator to below for the bearish reversal. If the price breaks 0.9710 support level so the bearish reversal will be started, if not so the price will be on ranging condition waiting for direction.

Over the past two days the US Dollar has seen an aggressive bid as hawkish Fed comments have prodded the market higher. This rallied USD/CHF right up to the bottom of the short-term resistance zone that we looked at last week. This could potentially open the door for short positions, but traders would likely want to investigate the risk-reward behind the setup to ensure that they’re comfortable: And perhaps more to the point, the trader would want to be comfortable fading a move that could have significant continuation potential, as the Federal Reserve has displayed a persistent pattern of hawkishness throughout 2016 that may continue to drive the dollar higher until we see some form of FOMC dovishness enter the equation.

For traders looking to play the short-term range by selling near-term resistance, there’s approximately 110 pips down to the top of the short-term support zone at .9682. This would mean a stop of less than 55 pips can offer a 1-to-2 risk-reward ratio, which would mean that traders would be able to wedge stops at or below the .9850 level in the pair. And while this wouldn’t get above the swing-high from August 31st, it could give traders a chance to get a stop above the price action swings from earlier in August.

Perhaps more interesting is the longer-term range; and if this strong Dollar theme on the back of hawkish Fedspeak can continue, this level may come into play in the not-too-distant future. The level at .9949 is extremely interesting, as this is the 61.8% retracement of the 2010 high to the 2011 low in the pair; and more-to-the-point, this set swing-high resistance in both May and July.

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A break above 0.9840 signals increasing bullish pressure, at that point in time the market is breaking out of asymmetrical triangle.

USD/CHF
Weekly (LOG)

“Since trading to a 6+ year high, USD/CHF has slowly declined. Broad upside potential is possible as long as price is above the 2011-2014 trendline. The trendline is near .9850 on log scale and just above .9700 on arithmetic. The topside of the wedge is worth knowing near 1.0450 (line off of 2012 and 2015 highs). Essentially, the wedge barriers are all I care about…all else is noise.” I care about where this week’s low was because it’s at former resistance from the 2012 high and June 2016 high. Former resistance providing support is bullish...so I’m bullish.


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Daily

-Since finding low at the 200 day average and September 2016 high, Swissie has rebounded but March is just around the corner. This is interesting because USD/CHF has topped on 3/11 and 3/10 the last 2 years…at just about the same price! Near term, pay attention to the 1.0020 (now) for support. If USD/CHF is going to stretch into 1.0200 before putting in a top (2 equal legs up at 1.0221), then I’d expect a turn higher now.


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What stands out to me is the recent downtrend for January 2017 through July 2017. During this period, the markets have been in risk-on mode yet we have seen overwhelming USD weakness creating the 900 pip downtrend for USD/CHF.

Additionally, within this downtrend it appears we have a W-X-Y pattern where the ‘X’ wave is a triangle pattern. We know from Elliott Wave theory that triangles precede the terminal wave of a particular pattern. Therefore, the higher probability move is USD/CHF moving higher to retrace a significant portion of the 2017 down trend.

Bottom line, the .9438 low is a key level to maintain a bullish bias against. The upper green resistance line is the next level of resistance on a sustained move higher.

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The U.S. Dollar has had a rather rough 2017. In a down-trend that’s seen as much as -12.3% of the U.S. Dollar’s value erased, even while the Fed talks up additional rate hikes, few currencies have been able to keep pace with the Greenback’s declines. After coming into the year trading above the 1.0300 level, USD/CHF has seen as much as 925 pips taken-out as the pair has driven-lower.

But after running into support in mid-July around the .9433 level (the 2016 low), the declines have slowed as USD/CHF has built into a rather volatile range-bound pattern. Resistance has begun to build around the .9773 level, and we’ve seen multiple iterations of resistance show-up here; each rebuking USD/CHF’s upward advance.

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Ichimoku does a fabulous job of showing trend followers which trends are worth joining, and if nothing else, which trendsnot to fight. Currency, Swiss Franc weakness aligns with that description as CHF continues to fall aggressively against a handful of currencies, and Ichimoku has highlighted breaking down conditions for the last handful of trading sessions.

EUR/CHF is recovering from a sharp pullback, thanks to the strengthening of haven currencies like the Swiss Franc in early February. Given the strong trend was seen on the chart, traders should be looking for signs of trend continuation higher.
Per Ichimoku, the lagging line (current candle close regressed 26-periods) is a key signal that the Bullish momentum is back. However, in addition to lagging line above price, traders that utilize Ichimoku also look to the lagging line in relation to the cloud. A lagging line break above the cloud, which is plotted forward 26-periods and discussed in detail in the

Adding RSI(5) to Ichimoku shows a momentum blast to the highest level since the trend accelerated aggressively led by the Euro last summer. Traders can look to the 26-day midpoint, called the Kijun-Sen at 1.1596 as support. A close below the Kijun-Sen could should the battle has yet to be won by the Bulls.

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