USD/CHF: Rebound from the Low Line of the Channel. Technical Analysis of 05/05/2016

USD/CHF: Rebound from the Low Line of the Channel. Technical Analysis of 05/05/2016

5 May 2016, 18:30
Roberto Jacobs
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USD/CHF: Rebound from the Low Line of the Channel. Technical Analysis of 05/05/2016

Review and dynamics
From the level of 1.0300 in December 2015 the pair USD/CHF has dropped by over 700 points by now. On the daily chart the pair declines in the channel with the lower limit at the level of 0.9445 and the upper limit at 0.9775 (ЕМА200, ЕМА144 on the daily chart).

Further decline in the pair is prevented by the strong support level of 0.9565 (ЕМА200 on the weekly chart) and 0.9445 (lower line of the descending channel). The price has repeatedly rebounded from the level of 0.9565 in August and October 2015 and continued the rise.

Our opinion
On 4-hour chart the indicators OsMA and Stochastic recommend to open buy positions; on the daily and weekly charts the indicators are reversing towards the long positions.

The pair is likely to continue the rise in the channel on the daily chart with the targets of 0.9660 (ЕМА200 and upper limit of the descending channel on 4-hour chart), 0.9705 (Fibonacci 23.6%, ЕМА50 on the daily chart). In case of breakout of these levels, the pair will go to the resistance level of 0.9765 (ЕМА200 on the daily chart) and 0.9820 (Fibonacci 38.2%).

As an alternative scenario the pair can break out support level of 0.9520 and continue to decline with the targets of 0.9445, 0.9400 and 0.9300.

However, further decline in the pair is prevented by strong support level of 0.9565 (ЕМА200 on the weekly chart). Remember that Swiss National Bank can interfere in trades in case of rapid rise in the Swiss currency.

Support levels: 0.9565, 0.9520, 0.9445 and 0.9400.
Resistance levels: 0.9620, 0.9660, 0.9705, 0.9765 and 0.9820.

Trading tips
Buy on the market. Stop-Loss: 0.9560. Targets: 0.9660, 0.9705, 0.9765 and 0.9820.
Sell Stop: 0.9560. Stop-Loss: 0.9710. Targets: 0.9520, 0.9445 and 0.9400.


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Rebound from the lower line of the channel

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Pullback from strong support level of 0.9565

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