FX.co ★ Technical analysis of USD/CHF for January 28, 2015

Fundamental overview:
USD/CHF is expected to consolidate with bullish bias after hitting eight-day high 0.9166 on Tuesday as markets await the U.S. FOMC interest rate decision. USD/CHF is underpinned by the franc sales on cross trades versus major currencies, the negative Swiss interest rates and the threat of the SNB CHF-selling intervention. But USD/CHF gains are tempered by the weaker dollar sentiment (ICE spot dollar index last 93.96 versus 94.97 early Tuesday) on selloff in the U.S. stocks (S&P 500 closed down 1.34% at 2,029.55 overnight), positions adjustment before the FOMC statement. At the same time surprise 3.4% MoM drop in the U.S. December durable goods orders (versus forecast +0.3%) and 4.3% YoY rise in the U.S. November S&P/Case-Shiller 20-city home price index (versus forecast +4.6%) outweighed rise in the U.S. Conference Board consumer confidence index to 102.9 in January from December's 92.6 (versus forecast 95.1), 11.6% increase in the U.S. new home sales to 481,000 in December (forecast +3.0%) and the U.S. January flash services PMI of 54.0 (versus forecast 53.8 and December's 53.3).

Technical comment:
The daily chart is mixed as the MACD is in bearish mode, but stochastics are turning bullish.

Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price is keeping above its pivot point, a long position is recommended with the first target at 0.9125 and the second target at 0.92. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.8840. A break of this target would push the pair further downwards, and one may expect the second target at 0.8750. The pivot point is at 0.8905.

Resistance levels:
0.9125
0.92
0.9250

Support levels:
0.8840
0.8750
0.87