USD/CHF Divergence In Place – Potential Double Top

While the USD/CHF scored a lower high yesterday, the MACD indicator – blue line on our Daily Snapshot chart – is diverging with December 2011 high.  The downside MACD cross is in place now – the blue line below the white one – warns an intermediate high has been achieved. The long-term picture still favors higher price for USD/CHF; however, the upside pivot level on Dow Theory lies at 0.86 -  leaving quite some range for a decent correction before the upside trend resumes – we expect a move back to 0.9250 region.

This move could have an effect on EUR/CHF cross, pressuring price toward the SNB’s taboo 1.20 level.  What about the stop-losses below this level, will they impact the liquidity of USD/CHF with many participants having placed safe stops below the 1.20 mark? Be careful below 1.1980, one stop loss after another may have a direct big impact on USD/CHF and EUR/CHF. Interesting times.

Have a successful trading day.
Best regards