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.
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.
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.
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 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.