After two unsuccessful breaks below the key 109.51 support level in as many sessions, heavy amountsof short-covering has helped to drive the Swiss Franc sharply higher this morning. While recent Swiss economicdata has shown consistent strength, very low inflation levels will make it difficult for the Swiss Franc to extendtoday’s rebound all the way back towards the early October highs. The December Swiss could rise up towards the110.84 level with weak readings on this morning’s US data, but may need to find a fresh source of safe-havensupport in order to hold onto these recent gains.
Technical Outlook
CHF (DEC): The downside crossover (9 below 18) of the moving averages suggests a developingshort-term downtrend. Daily stochastics declining into oversold territory suggest the selling may be drying upsoon. The close below the 9-day moving average is a negative short-term indicator for trend. The close over thepivot swing is a somewhat positive setup. The next downside objective is now at 108.62. The next area ofresistance is around 110.04 and 110.47, while 1st support hits today at 109.12 and below there at 108.62.