USD/CHF: Some pause against key .9138/58 resistance - JPMorgan

FXStreet (Bali) - The short term setup suggests some pause against key .9138/58 resistance, according to JP Morgan FX Strategists, who despite that, remain optimistic about the medium term backdrop for the USD.

Key Quotes

"In line with the improved backdrop for the USD, the setup for USD/CHF suggests a growing risk that a deeper upside retracement can develop. Like other USD pairs though, we sense some initial pause can develop given the proximity to key resistance levels and the current overbought setup. Still, we are closely monitoring the .9135/.9158 area for signs of a deeper extension. This zone includes the 38.2% retracement from the 2013 high, as well as the key January peak."

"In line with the improved medium term setup, corrective retracements are viewed as buying opportunities. Sustained breaks would initially target the .9250/70 zone (50% retracement from the 2013 high). Short term retracements should find support in the .9038/17 zone (former high from June and recent breakout, as well as the 38.2% retracement from the July low). Still, the .8955 area July breakout should be a max if a more sustained advance is in the cards."