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USDCHF moves higher on Swiss government support


The USDCHF moved higher today and looks toward the next longer term targets . The price has moved higher on the back of the Swiss Government support for exporters and other industries such as tourism which are being hurt by the strength in the CHF.  Although the governments moves are designed to help as a result of the currency strength, the announcement has helped weaken the CHF in the process as well (at least for today).  The SNB tried unsuccessfully to stem the strength of the CHF in 2010, but has since abandoned such measures.

The move higher has pushed the price back above the 100 day MA after an earlier fall to support against the underside of the trendline (see daily chart above).  The key upside target for the pair now comes in at the 0.9803 level where the 38.2% Fibo Retracement of the move down from the August 2010 high to the Dec 2010 low comes in currently. Stay above the 100 day MA and the bias remains to the upside on a longer term basis.

Of the hourly chart, the price is approaching the weeks high at the 0.9744 level. This may slow the surge higher.  A break of the level will next target last Friday’s high at 0.9774.

On the downside for today, look for support at the 0.9713 level. This is the 61.8% of the move down from the Feb 11th high to the low today.  If this level can hold, the shorts/bulls should feel more confident about the move higher today.  A break of that level, howver, could see the price move down to the 0.9697 area. The underside of the trendline break, the 50% retracement and the 100 bar MA are all located in this area. This level should find stronger support today (see hourly chart below).