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USD/CHF statistical and technical analysis

The current price of the USD/CHF exchange rate is 0.8965 (May 18, 2021). The pair has been declining dynamically since our last analysis. It is also currently in an important zone. Let us therefore now turn to statistical and technical analyzes.

Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 0.46% and -0.48% , respectively. The estimated daily return in both directions based on their probability of occurrence is 0.23% and -0.24% . Yesterdayยดs return was only 0.14% . Our scoring is currently neutral (2 ) for the month-on-month change and 1 for price indexation. This means that we could soon see the strengthening of the bulls due to the rising phases of the cycles. Both scorings range from -3 up to 3 . The development of the estimated cycles based on our analytical systems is shown in the following chart.

USD/CHF daily price indexation Source: WALFIR

Different moving averages (MAs) help us better identify trends across multiple time frames. We use 3 basic MAs to find out which sentiment dominates each horizon. The purple line represents the monthly , the green line the 6 months and the yellow line the annual moving average. According to all MAs, USD/CHF is in a bearish sentiment because it is below them. Compared to our last analysis, it is quite the opposite.

USD/CHF daily price development Source: WALFIR

Since the end of March, there have been more downward trends. In the last year, we also recorded a medium-term maximum of 9 consecutive days. Upward trends did not exceed more than 5 days in the same period. However, the maximum decrease was in the measured period of 7 days. We could use the average long-term ATR (Average True Range) obtained from daily data (0.67% ) to estimate Stop Loss orders for our positions. The current value is 0.60% . Approximately 90% confidence interval (return between -1% and 1% ) is shown in the histogram below by a red rectangle.

USD/CHF daily return distribution Source: WALFIR

We could use the last decile of low to high returns (1.50% ) to estimate Profit Targets, as shown in the chart below.

USD/CHF daily lows to high distribution Source: WALFIR

Basic technical analysis still supports bearish sentiment as the exchange rate creates lower highs and lower lows. However, we can clearly see the divergence between the market price and the RSI that has been forming since the beginning of this year. Volumes have been above average in recent days. All moving averages are above the exchange rate. USD/CHF is currently also close to the demand zone (green rectangle) with a strong lower part, where is also the Fibonacci retracement level of 23.60% . In addition, there is also a strong psychological level of 0.9000 . Another psychological level of 0.8900 could be potential support for the exchange rate in the event of a further decline.

USD/CHF basic technical analysis Source: TradingView

WALFIR Technologies is one of the three divisions of WALFIR s.r.o., which is based in Slovakia. The primary interests of this division are analytical, quantitative, and algorithmic...

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