Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 0.46% and -0.47% , respectively. The estimated daily return in both directions based on their probability of occurrence is 0.23% and -0.23% . Yesterday´s return was -0.43% , which is below the first standard deviation. Our scoring is currently positive (1 ) for the month-on-month change and 1 for price indexation. This means that we estimate a slightly positive phase of the cycle. 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.
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 bullish sentiment as it is currently also rising above the short-term MA.
Source: WALFIR
Since our last analysis, there has been more downward pressure, where we have seen a maximum of 6 consecutive days. The highest decrease in the measured period was 9 days. However, upward trends in the last week were dominated by 4 consecutive days. The maximum growth was 7 days in the measured period. We could use the average long-term ATR (Average True Range) obtained from daily data (0.65% ) to estimate Stop Loss orders for our positions. The current value is 0.57% , which is very close to the average. Approximately 90% confidence interval (return between -1% and 1% ) is shown in the histogram below by a red rectangle.
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.
Source: WALFIR
The basic technical analysis supports bullish sentiment after the dynamic upward movements in mid-June and early August. The divergence between the market price and the RSI supports this scenario. Volumes slow down from the last peak (red ellipse). USD/CHF is currently close to the demand zone (green rectangle), where is also the Fibonacci retracement level of 23.60% , along with the long-term moving average and the psychological level of 0.9000 . Today, the short-term moving average acts as a resistance.
Source: TradingView
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