USD/CHF is expected to trade with an upward bias above 0.9675. While the pair has posted a decline of 0.9725 (26 September), a base of support at 0.9675 has formed and has allowed for a temporary stabilization. Even if a continuation of the consolidation cannot be ruled out, its extent should be limited.
The President of the federal Reserve, Janet Yellen, commented that the central bank to raise its interest rates gradually as it would be imprudent to pursue a monetary policy on hold until inflation is back to 2%. She added, «Without more modest increases in the federal funds rate over time, there is a risk that the labour market might become overheated, which could create a problem of inflation down the road that could be difficult to overcome without causing a recession.»
Therefore, above 0.9675, for a look that’s more bounce with targets at 0.9745 (highest in September, 21 and 25) and 0.9770 extension.
Chart Explanation: The black line indicates the pivot point. The current price above the pivot point indicates a bullish bias and the price below the pivot point indicates a short position. The red lines show the levels of support and the green line indicates the level of resistance. These levels can be used to enter and exit trades.
Strategy: BUY Stop Loss: 0.9675, take Profit: 0.9745
Resistance levels: 0.9745, 0.9770, and 0.9795
Support levels: 0.9650, 0.9625, and 0.9775