USD/CHF: 0.9553 to cap a deeper correction to the upside – Credit Suisse

USD/CHF posted a bullish ‘key reversal day’ yesterday to suggest a deeper correction to the upside. The pair appreciates nearly 0.1% so far today to 0.9520, approaching the top of the last 12 days trading range at 0.9553 which ideally caps, per Credit Suisse.

Key quotes

“USD/CHF saw a sharp reversal higher on Monday, posting a bullish ‘key reversal day’ to suggest we might see further corrective upside in the near-term, which ideally is then capped by 0.9553.”

“Post the corrective phase, we look for weakness to resume, with support seen initially at 0.9508, then 0.9479, ahead of 0.9442/33 and 0.9425/20, where we expect to see a first attempt to hold. Removal of here would then expose the current June low at 0.9376, beneath which would see the recently completed ‘hammer’ candlestick negated and we would then expect to see another leg lower. Support is seen thereafter at the 78.6% retracement of the March 2020 surge at 0.9337/21, where we also could see fresh buyers at first.” 

“Above 0.9553 in contrast would see a minor base established to suggest a deeper correction higher, with next key resistance area seen at 0.9628/51.”