The USD/CHF found itself sharply lower on Thursday from a combination of dovish FOMC minutes and risk-off trades that favoured the Swiss franc.
Commerzbank’s head of technical analysis for the fixed income, currencies and commodities department Karen Jones has predicted a drop to the 0.9115/0.9080 region.
According to the analysis, this move is more of a near-term correction. In the long run, the goal is for the pair to resume the uptrend towards the April high at 0.9472. This move follows from the curtailment of the correction at 0.9115/0.9080. Sequential pitstops along the way could feature at 0.9274, the March 12 high at 0.9325 and the April peak at 0.9472.
Yesterday’s huge move to the south broke the rising wedge by a convincing penetration percentage, smashing past the 0.91899 support.
This move tested the next support at 0.91361, with a further retest on Friday. For the price to meet the 0.90809 support (28/29 April lows) called by Credit Suisse, 0.91361 has to give way to bearish pressure. Below that price level, 0.90351 forms an additional target.
On the other hand, a bounce at the current support negates this outlook and opens the door for a potential test of 0.91899. If this resistance is uncapped, then 0.92264 becomes a new target. Uptrend restoration depends on bulls taking out the 0.92715 high, which provides a platform for 0.92953 to come into the picture.
