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Forex pairs in this Article » USD/CHF (London) - The USD/CHF is consolidating and unwinding the overextended downside conditions of this month along support 0.9230/40

USD/CHF awaits next bout of sentiment and data

With a light calendar for the pair, eyes remain on the FOMC and the QE3 programme. USD/CHF has been in free-fall and conditions appear to be over extended to the downside for the time being. The pair are consolidating mid week at these Jan, Mar and May support and resistance levels and yearly median zone. The market had been very sensitive to data releases; more so than the norm and trading is both erratic and at times irrational. Some traders are reporting that they are simply sitting on the side-lines here for the time being. The markets are volatile and reacting to rumours around tapering and sensitive to sentiment around central bank policy. As BMO Capital markets put it, in the event of very good economic data, market participants may well conclude that tightening is on the way, but that it will be balanced and lack aggression so as not to “endanger the recovery”, even if it does occur sooner rather than later. They went onto say that in the event of rather poor economic data on the other hand, market participants may well conclude that if there is no “recovery” to speak of, then QE tapering can presumably be pushed back indefinitely.

Technically, USD/CHF indicators continue to point to the downside

Teams at said that they would consider the pair’s movement to the downside starting from top at 0.9838 levels as the AB=CD bearish harmonic Pattern to see the pair consolidating below 88.6% correction of CD Leg, and below the harmonic support connecting between bottom A and C which is negative and might push the pair further to the downside. It is significant to break 0.9205 levels to give the pair more momentum, and negative Linear Regression Indicators supports their outlook. They added that the trading range for today is among key support at 0.9125 and key resistance at 0.9345. They noted that the general trend over short term basis is to the downside stable at levels 0.9775 targeting 0.8860.
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