The December Swiss has remained fairly subdued during overnight trading, but continues to show signs of being “top-heavy” around the 110.00 area. While a modest inflow of safe-haven support before Sunday’s German election should help the Swiss Franc closely track the Euro this morning, it may be difficult to hold onto recent gains if global risk appetites stay strong after the Fed’s tapering inaction. The December Swiss may fall back towards the 109.65 level heading into the weekend, but could be facing a much larger pullback early next week if the German elections fail to throw up any dramatic surprises.
Technical Outlook
CHF (SEP): Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The close above the 9-day moving average is a positive short-term indicator for trend. It is a mildly bullish indicator that the market closed over the pivot swing number. The next upside objective is 110.43. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 110.19 and 110.43, while 1st support hits today at 109.61 and below there at 109.27.