FxWirePro: USD/CHF upswing appears to be exhausted at channel resistance – Tunnel spreads conducive for speculators

The pair could not hold onto major resistance today which is at upper channel line (at around 0.9894 levels).

The bull swings were oscillating within the range of sliding channel so far, prices have bounced as well declined as and when it has approached the channel extreme points (you can presumably very well understand with grey shaded areas in the circles).

Daily oscillators are absolutely puzzling for now with indecision but the same on weekly and monthly are hinting slightly bearish bias.

Slow stochastic curves have already approached overbought zone and attempts of %D crossover that signals absolutely no interests in buying today, while RSI is trending below 61 levels.

On the flips side, it was neither ready to give up below 7DMA, any drop below DMAs can bring in bears back in business.

On monthly terms, although dollar showing strength against the Swiss franc, it has been sliding southwards even on monthly charts with intensified bearish momentum (both RSI and stochastic have been indecisive but slightly bears favour).

Trade tips:

We wouldn’t be surprised even if it hits 0.9823 levels for the day in intraday terms, we rely on the rejection of the channel resistance as they pop up with overbought pressures thus far, so smart way to approach this pair at this juncture is to deploy the option tunnel using ATM puts is structured as a binary version of a conventional put spread, i.e. long delta puts with higher strikes while writing the lower strikes for above mentioned targets on either side.

Thus, an In-The-Money tunnel would be formed of an In-the-money -0.75 delta put below the current exchange rate less an Out-Of-The-Money put above the exchange rate. The delta of -0.55 on combined position with slightly negative theta is preferred on this execution.