Review and dynamics
Due to strong data on the US labor market, released last Friday, the pair USD/CHF has broken down the key resistance level of 0.9770 and reached strong resistance level of 0.9820 (Fibonacci 38.2% to the decline since December 2015 and the level of 1.0300).
Positive dynamics in the pair USD/CHF continues and the USD maintains its positions in the currency market.
Our review of 2nd of August stated that if Friday’s data on the US labor market were weak, the pair USD/CHF would continue to decline. In case of the positive US labor market data after reaching the level of 0.9635 the pair may rebound from the lower line of the channel and go up to 0.9705. In case of the positive labor market data the pair USD/CHF will rise and return to the ascending channel on the daily chart with the upper limit near the level of 0.9950 (upper limit of the range).
The first part of our prediction came true. Breakout of the resistance level of 0.9820 may trigger further rise in the pair USD/CHF and implementation of the second part of our prediction: the rise in the pair in the ascending channel with the target of 0.9910 (Fibonacci 50%) and 0.9950 (upper limit of the channel).
On 4 hour and daily charts the indicators OsMA and Stochastic give signals for long positions.
As an alternative scenario the pair USD/CHF can go down below support level of 0.9770 (ЕМА200, ЕМА144, ЕМА50 on the daily chart) to the lower limit of the range at the level of 0.9635, which is crossed by the lower line of the ascending channel on the daily chart, 0.9580, 0.9520.
Support levels: 0.9770, 0.9705, 0.9635, 0.9580 and 0.9520.
Resistance levels: 0.9820, 0.9910, 0.9950 and 1.0000.
Sell Stop: 0.9790. Stop-Loss: 0.9830. Targets: 0.9770, 0.9705, 0.9635, 0.9580 and 0.9520.
Buy Stop: 0.9840. Stop-Loss: 0.9790. Targets: 0.9910 and 0.9950.
In the ascending channel
At the resistance level of 0.9820