USD/CHF looks set to leap out the gates, gold eyes 2700

USD/CHF technical analysis:

A solid trend has developed on the daily chart since its latest rebound from 0.84, the level ING analysts strongly suspect that SNB have intervened when prices trade beneath it. Yet the rally is not too strong as to appear overstretched, like say USD/JPY. And USD/CHF could still rally a further 1.6% (140 pips) before it retests its 200-day EMA. Also note that Monday’s bullish range expansion day was followed by a small inside day at the top of Monday’s range to show demand for the pair remains in place. Furthermore, the US-CH 2-year spread has accelerated higher ahead of prices to suggest upside pressure for USD/CHF could be in play.

The 1-hour chart shows a bullish trend with prices now consolidating in a sideways range, which is holding above the weekly R2 pivot point. Prices are respecting the 50-hour EMA, and the averages are in a clear bullish sequence to show momentum remains bullish over multiple timeframes. The recent swing lows were also coupled with high volumes to suggest demand above 0.8600.

Bulls may be tempted to enter around current levels, or seek dips towards the weekly R1 pivot point in anticipation of a bullish breakout from its range. The weekly R1 and R3 are now on focus for upside targets.

Gold futures technical analysis:

I outlined my bias for gold to rally from the 2620 area last week ahead of the US CPI report, and pleased to see that it has played out well. A bullish engulfing day formed on Tuesday to suggest an interim swing low has formed at 2654. It now looks like gold wants to push for 2700 and have a crack at another all-time high.

Dips within Tuesday’s range could appeal to bulls, although momentum on the 1-hour chart is already pointing higher. For now, 2690 (daily R1) , 2697 (weekly R1) and 2700 are in focus for bulls. But they should be wary of false breaks around the prior ATH, as such levels can wreak havoc for those playing around with the actual break.

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

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