Today although the stock story is still the same with the major indices down another 1%, the USDCHF is sharply higher. You can blame lower CPI inflation. Remember as well that the manufacturing PMI data at a Switzerland yesterday was also much weaker.
The rally has taken the price back above the 100-hour moving average, the 200 days moving average.
It also moved above the September 18/19 highs at 0.99828 and the parity level at 1.0000.
The price has reversed back lower as stocks continue to slide and perhaps, we get some flight into the safety of the CHF now. However, the pair is also testing the highs from September 18/19 and the swing hi from Monday’s trade at 0.99828 to 0.99868.
IF the buyers are to keep control, this area should attract buyers. If the price breaks below, the bullish waters get a little bit muddier intraday (i.e., we should see some additional selling pressure).
Despite successfully trading above key support confluence, the USD/CHF pair fails to provide a daily closing above 61.8% Fibonacci retracement of April-August downpour. The quote takes the bids to 0.9975 while heading into the European open on Thursday.
Given the bullish signals from 12-bar moving average convergence and divergence (MACD) and 14-bar relative strength index (RSI), the pair is likely to extend north-run towards late-May highs surrounding 1.0100 if successfully closing above the key Fibonacci retracement level of 1.0016.
USD/CHF LONG (Buy)
ENTER AT: 0.9975