September 16, 2021 13:52:56

The swissie is the weakest major on the month and week, with sellers especially abundant today. We could pick out several different crosses with NZD/CHF and CAD/CHF breaking (trendline) resistance to recent highs. CHF/JPY has broken down to levels last seen in April.

The major is now surging up to the July highs at 0.9274. This is a key level to watch if we are to see more downside in CHF.

EUR/CHF poised to break higher

We wrote about this pair around a month ago when it had rebounded back above 1.08 in the middle of August. Since then, the pair sold off again but couldn’t move below 1.07 which we called the SNB “line in the sand”.

This next retracement has moved above the previous rebound high at 108.40 and a Fib level (38.2%) of the March-August move at 1.0869. Prices have consolidated over the last ten days at the top of the long-term descending channel from March with the 200-day SMA also acting as resistance at 1.0895.

If buyers can break this ceiling, we can push higher to 1.0976/86 and beyond. The bottom of the recent range at 1.0832 acts as initial support, with a Fib level (23.6%) at 1.0803. The former really needs to hold, otherwise we are back into the bearish channel.

GBP/CHF at the top of the range

This cross has been trading sideways since April between 1.28 and 1.25. Range trading can be extremely profitable if risk management is efficient. Prices dropped out of the range briefly below 1.25 in late August, but the 200-day SMA saved the day.

The pair is now trading just below the top of the range with today’s high at 1.2809. Prices have rarely hung around here for more than a couple of days at the most before falling back into the range. Stops can be placed above the June high at 1.2856 to play the range back towards 1.27 and below.

Swiss bears will be looking to break the top and push on to the April high at 1.3073. The longer we trade sideways, the more range expansion we should see.