By: Mike Kulej
After reaching the 1.1700 level, the USD-CHF has been retracing for a better part of the last two weeks. Recently, this move has been accelerated by the Swiss National Bank announcement regarding its Franc intervention policy. Fearful of inflation, the SNB halted, for now at least, interventions aimed to weaken its currency. In response, the Franc strengthened across the board, including the USD-CHF pair.
Right now, this pair pulled back to the 50% Fibonacci retracement level of the previous up swing from 1.0435 to 1.1730. In present environment, the price can easily continue lower to the 62% retracement level, where a strong resistance might be expected. The 62% level is very often a turning point when it comes to corrective moves within a larger trend. In case of USD-CHF, this is at around 1.0900 price level.
To make this area even more important, the daily chart also shows previous resistance there, which often changes into a new support. In addition, that is where the 100 SMA is now, another supportive technical indicator. Should the USD-CHF fall to 1.0900, this could be a solid buying opportunity on emergence of any bullish reversal pattern there.
USD-CHF and Fibonacci
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