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Talking Points:
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USD/CHF Technical Strategy: Flat
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Support: 0.8777-83 (38.2% Fib exp., channel top), 0.8723 (50% Fib exp.)
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Resistance:0.8844 (23.6% Fib exp.), 0.8903 (Apr 4 high)
The US Dollar continued to fall against the Swiss Franc as expected after prices put in a bearish Evening Star candlestick pattern. The pair is testing support in the 0.8777-83 area, marked by the top of a falling channel set from late January and the 38.2% Fibonacci expansion. A break below this barrier initially exposes the 50% level at 0.8723. Alternatively, a reversal upward that takes prices above the 23.6% Fib at 0.8844 aims for the April 4 high at 0.8903.
Risk/reward considerations argue against entering short with prices trading in close proximity to relevant support. On the other hand, taking up the long side looks premature absent a defined bullish reversal signal. With that in mind, we will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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