USD/CHF technical analysis: Shapes steady decline, rebound looks feeble

Anthony Charalambous, CFTe XM

USDCHF appears to have moulded a stable descent from the nine-month peak of 0.9472, a key level where the pair collapsed back in July 2020. The completed bearish crossover of the 200-period simple moving average (SMA) by the 50-period one, as well as the gradual dipping of the 100-period SMA, is nourishing the negative structure. Nonetheless, the pair has bounced around the 0.9188 mark and is presently pushing over the Ichimoku lines, which are reflecting a pause in the downwards trajectory.

The short-term oscillators are representing the latest rebound in the price but have yet to demonstrate a convincing positive turnaround. The MACD is in the negative region but is rising above its red trigger line, while the RSI is attempting to improve past the 50 level. Furthermore, the stochastic oscillator has crept into overbought territory and shows no clear signs in waning so far in the price rebound.

If buyers manage to extend gains over the Ichimoku lines, vital resistance may originate from the 0.9259-0.9268 region. This zone may receive reinforcements by the approaching 50-period SMA currently at 0.9280, and the intersecting of a developing supportive trend line. However, if the mentioned section is overstepped, the Ichimoku cloud, slightly overhead may impede the price from challenging the 0.9302 border.

If sellers retake the reins, initial support could arise between the Ichimoku lines from 0.9233 until 0.9213, before the bears revisit the 0.9188 barrier. Resuming the descent, the price may dive towards the 0.9136 trough, before aiming for the 0.9100 handle.

Summarizing, USDCHF is maintaining a bearish tone below the SMAs. Yet, it appears that the pair means to test the 0.9259-0.9268 region before resuming the downwards trajectory.

Author

Anthony Charalambous, CFTe

Anthony Charalambous joined XM in 2019 and specializes in preparing daily technical analysis, using his years of trading experience to provide detailed forecasting for all major asset classes such as forex, indices, commodities and equities.

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