USD CHF Forecast February 3, 2015, Technical Analysis

The USD/CHF pair tried to rally during the course of the session on Monday, but as you can see we pullback to form a shooting star. Remember, the Swiss National Bank step away from the currency peg that it had recently had in the EUR/CHF pair, as it has essentially given up on trying to keep people from buying the Swiss franc in general. Granted, this was more or less directed at the European Union, but of course had a knock on effect against anything related to the CHF in general. With that being the case, we would anticipate the Swiss franc appreciating in general, and that of course won’t be different in this particular market.

Ultimately, we feel that this market will go much lower if we can break below the lows from the Friday session, because that would essentially trigger sell signals onto separate shooting stars. It should also keep in mind that the 50% Fibonacci retracement level has been tested, and started to show significant selling pressure in order to form a very bearish looking candle. Ultimately, that should send this market down to the 0.90 level, and then possibly the 0.85 level as the downtrend should continue.

With that being the case, you have to keep in mind that the US dollar of course is stronger than most other currencies, so this move might be a little bit more stable than you would see in other markets such as the EUR/CHF, GBP/CHF, and the SGD/CHF pair. Because of this, it is obvious that the Swiss franc should appreciate in general, but with the US dollar been a bit more stable this might be one of the easier trades to take simply because you won’t find yourself being shaken around so much.

On the other hand, if we break out above the top of the shooting star, we would anticipate a move to the 0.95 level which lines up nicely with the 61.8% Fibonacci retracement level. At that point time, we would anticipate quite a bit of selling pressure, pushing this market back down to the lows as it was such a massively supportive level previously.