USD/CHF sees a correction lower on the cards – Commerzbank

In view of Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair could face a pullback following a negative divergence in the RSI.

Key Quotes

“USD/CHF’s new high of 1.0205 has been accompanied by a divergence of the daily RSI and the market has sold off back into its range. This loss of upside momentum suggests a correction lower is in the offing – we note the Elliott wave is implying a 1.0000/.9930 retracement”.

“We look for only a shallow correction ahead of resumption of the upmove. Above 1.0192 lie the 1.0256/1.0328 2015 highs. The 1.0328 level is regarded as a major break up point to the 1.0910 61.8% retracement of the move down from 2005”.