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20 Sep 2013
USD/CHF struggles to sustain its gains above 0.9100
FXstreet.com (Athens)- The USD/CHF managed to trim its severe losses post FOMC decision, but still struggles to maintain its gains above 0.9100 area.
The USD/CHF seems to be trapped in an downtrend mode
The USD/CHF managed to break out the resistance as of 0.9100, but it’s very difficult to sustain an uptrend momentum. What’s more, traders should anyhow bear in mind that the sharp fall of the pair, did support a lot the uptrend of the EUR/USD as it is widely known that the two pairs have a strong negative correlation. Yesterday, Switzerland’s central bank affirmed its cap on the franc and vowed to defend it with unlimited currency interventions to protect the economy. The Swiss National Bank (SNBN), led by President Thomas Jordan, kept its cap on the franc at 1.20 per euro. It also left the band for its benchmark interest rate unchanged at zero percent to 0.25 percent, as forecast by all 21 economists in a Bloomberg News survey.
Technical Outlook on USD/CHF
Karen Jones, Head of Technical Analysis at Commerzbank, mentions that “the pair has sold off to the 2012-2013 uptrend.USD/CHF has crashed lower to the 2012-2013 support line lies at 0.9092. Currently our favored view is for losses to hold this uptrend, however we would need to see a rapid bounce back above the 0.9146 August low just to alleviate immediate downside pressure and signal a return to 0.9261 – the 23.6% retracement of the move down from July. Failure to hold over 0.9090 will see USD/CHF sell off to the .9023 2013 low and then the .8931 2012 low.”
The USD/CHF seems to be trapped in an downtrend mode
The USD/CHF managed to break out the resistance as of 0.9100, but it’s very difficult to sustain an uptrend momentum. What’s more, traders should anyhow bear in mind that the sharp fall of the pair, did support a lot the uptrend of the EUR/USD as it is widely known that the two pairs have a strong negative correlation. Yesterday, Switzerland’s central bank affirmed its cap on the franc and vowed to defend it with unlimited currency interventions to protect the economy. The Swiss National Bank (SNBN), led by President Thomas Jordan, kept its cap on the franc at 1.20 per euro. It also left the band for its benchmark interest rate unchanged at zero percent to 0.25 percent, as forecast by all 21 economists in a Bloomberg News survey.
Technical Outlook on USD/CHF
Karen Jones, Head of Technical Analysis at Commerzbank, mentions that “the pair has sold off to the 2012-2013 uptrend.USD/CHF has crashed lower to the 2012-2013 support line lies at 0.9092. Currently our favored view is for losses to hold this uptrend, however we would need to see a rapid bounce back above the 0.9146 August low just to alleviate immediate downside pressure and signal a return to 0.9261 – the 23.6% retracement of the move down from July. Failure to hold over 0.9090 will see USD/CHF sell off to the .9023 2013 low and then the .8931 2012 low.”