Consolidation range: After falling with the QE3 expectation and announcement, The USD/CHF has gotten into a narrow consolidation range seen in the 4H chart between Friday’s (9/14) low of 0.9237 and this week’s high so far just under 0.93. Note that sideways trading in the near-term is going to challenge the newly established declining channel resistance seen in the 4H chart. A break above 0.93 and the channel resistance suggests some further corrective rally.
Resistance for pullback: The correction scenario has 0.9340 as the first pivot to monitor. Then the more important level is 0.9420. Holding below this and staying under the 200-day SMA should be a strong sign that the market is still focusing on the breakout and attempting to push back below the 0.9237 support. A break below 0.9235exposes the next key support pivot at 0.8930, but we should also monitor the 0.90 psychological support.
Reversal scenario: IF the market pushes above 0.9420 however, the outlook becomes unclear, though the bullish outlook is held until we see the market clear above 0.9550, and the declining trendline seen in the daily chart, then we are talking about a bullish continuation, refocused on the 0.9970 to parity area.
USD/CHF Daily Chart 9:55AM 9/17/2012