The Swiss Franc has fallen more than 2.7% against the US Dollar from the mid-August / yearly extremes with USD/CHF stretching into key resistance this week. The advance remains vulnerable while below this threshold with the weekly opening-range now in focus. These are the updated targets and invalidation levels that matter on the USD/CHF charts. 

SWISS FRANC PRICE CHART – USD/CHF DAILY

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Chart Prepared by Michael Boutros, Technical Strategist; USD/CHF on Tradingview

Technical Outlook: In my most recent Swiss Franc Trade Outlook, we noted that USD/CHF was approaching a major, “resistance zone at 9931/48 – a region defined by the 100% ext of the August advance and the 50% retracement of the yearly range.” Out bottom line cited that we were, “looking for a pivot here with the broader advance at risk while below 9951.” Price registered a high this week at 9946 before turning lower with Swissy poised to mark an outside-day reversal off fresh monthly highs today.

SWISS FRANC PRICE CHART – USD/CHF 120MIN

(Click on image to enlarge)

Chart Prepared by Michael Boutros, Technical Strategist; USD/CHF on Tradingview

Notes: A closer look at Swissy price action sees USD/CHF trading within the confines of an ascending pitchfork formation extending off the August lows with the recent advance holding below the 75% parallel for the last two weeks. Note that this slope converges on the 9948/52 region over the next few days and further highlights the technical significance of this threshold.

Weekly open support rests at 9875 backed closely by the highlighted trendline confluence. A break back below the lower parallel/yearly open at 9839 would be needed to suggest a more significant high was registered this week. A topside breach of the weekly opening-range highs / 9952 would mark resumption of the broader uptrend with such a scenario targeting pitchfork resistance (currently ~9990s) and the 61.8% retracement at 1.0016.

Bottom line: USD/CHF is testing uptrend resistance here with the recent price advance vulnerable while below 9948/52. From a trading standpoint, a good spot to reduce long-exposure / raise protective stops. Look side-ways to lower with a break of the weekly range lows to challenge the lower parallels. Ultimately, a larger decline would offer more favorable long-entries closer to trend support.

SWISS FRANC TRADER SENTIMENT – USD/CHF PRICE CHART

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• A summary of IG Client Sentiment shows traders are net-short USD/CHF - the ratio stands at -1.12 (47.1% of traders are long) – weak bullish reading
• Long positions are 1.6% lower than yesterday and 20.5% lower from last week
• Short positions are0.7% lower than yesterday and 12.0% higher from last week
• We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/CHF prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USD/CHF-bullish contrarian trading bias from a sentiment standpoint.