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% . Yesterday´s return was only 0.15% , well below the first standard deviation. Our scoring is currently very positive (3 ) for the month-on-month change and 0 for price indexation. This means that we estimate the last growth phase of the cycle. Indexation is specifically at its extreme. 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.
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 bullish sentiment as it rises dynamically above them. Compared to our last analysis, it is quite the opposite.
Since the beginning of this year, there have been more downward trends, where we recorded a maximum of 4 consecutive days. The highest decline in the measured period was 9 days. However, upward trends dominated in the recent weeks. The maximum growth was in the measured period of 5 days. We could use the average long-term ATR (Average True Range) obtained from daily data (0.66% ) to estimate Stop Loss orders for our positions. The current value is 0.49% . Approximately 90% confidence interval (return between -1.00% and 1.00% ) is shown in the histogram below by a red rectangle.
We could use the last decile of low to high returns (1.50% ) to estimate Profit Targets, as shown in the chart below.
The basic technical analysis supports the bullish sentiment after the dynamic upward movement in mid-June. However, we clearly see the divergence between the market price and the RSI that has been forming since the beginning of April. Volumes slow down from the last peak (red ellipse). All moving averages are below the exchange rate and could act as support in the event of a downturn. There is also a strong demand zone (green rectangle). USD/CHF is currently close to the support line of 0.9210 (blue line) and the Fibonacci retracement level of 38.20% .