USD/CHF to continue the correction higher on a break above 0.9173 – Commerzbank

USD/CHF rises for the third consecutive day as the pair remains mildly bid while trading near 0.9160 on Tuesday. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the USD/CHF pair to continue climbing above the 55-DMA at 0.9173 with potential to reach the six-month downtrend at 0.9456.

Key quotes

“USD/CHF has eroded its four-month downtrend. The close above here introduces scope for a deeper correction to the 55-day ma at 0.9173, which is currently holding and potentially the 38.2% retracement of the move down from the March peak at 0.9342.” 

“It should be noted that the market is possibly basing and above 0.9342 would suggest a test of the six-month downtrend at 0.9456.” 

“Dips should remain contained by 0.9078/48. Only a slide below 0.9048 will trigger a slide back to the 0.8998 recent low.”