Technical Analysis USDCHF : 2014-09-05

Hello, dear traders. Today we are going to look into the US dollar against the Swiss franc trading pattern. As we can see at the chart, prices jumped substantially in the last candle and drew resistance line at 0.9333, advancing from support at 0.9173. The valid rising trend line suggests that the upward development is more likely to continue and that suggests that the cap at 0.9333 would eventually be breached. Moreover, the Simple Moving Averages are below prices adding to the upside pressure. However, the cap at 0.9333 represents the 261.8% extension of the corrective move from 0.9037 to 0.8854 suggesting that we may be at the end of a bullish impulsive wave, therefore a corrective move may follow.

Furthermore, at the below chart we can see the daily volumes of futures and options traded on the Chicago Mercantile Exchange. We can see that on the 4th of September the volume increased validating the upside move to cap at 0.9333. Therefore, we are confirming with volume that the bulls prevail in the USDCHF trading.


Looking at the oscillators, the Stochastic is overbought since it’s above the 85% line. The OsMA approached previous peaks line and moves upward. The RSI (14) went above the 70 line indicating that is in the overbought zone as well. In our opinion and based on this analysis the currency pair in the longer term is more likely to continue its upside path however in the shorter term due to the overbought oscillators we would expect a corrective move. In addition, the bullish traders have been stronger and they are making profits in the last two weeks thus sooner or later they will start collecting these profit which would induce the pair in a corrective move. Lastly, investors’ focus turns to Non-Farm Payrolls release in today’s trading where a lower than expected number could trigger a corrective move.



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