USD/CHF Outlook: Swiss franc returns to strength, signaling that SNB's intervention was so far rhetoric

USD/CHF

The Swiss franc regained traction and strengthened on Thursday after corrective action from 0.9612 (16 Jan low, the lowest since Sep 2018) was strongly rejected on Wednesday at 0.9728 (falling daily Kijun-sen) that faded hopes in the market about SNB's intervention. The Swiss central bank's chairman Jordan said that the franc is highly valued and that the central bank has right to intervene and prevent the currency to become too strong and steer monetary conditions, but not to manipulate and get an advantage over the other currencies after the US put Switzerland in the list of currency manipulators. Studies on daily chart continue to work in favor of further pair's weakness, as MA's remain in full bearish setup and Wednesday's spike was short-lived and failed to close above initial barrier at 0.9678 (10DMA). Bearish momentum continues to strengthen and RSI and stochastic indicators are heading south. Long upper shadow on Wednesday's bearish daily candle, marks strong upside rejection and weighs on near-term action. Fresh weakness off 0.9728 high has already retraced 50% of 0.9612/0.9728 recovery leg and pressure pivotal supports at 0.9655 (Fibo 61.8% / base of 4-hr cloud) with break here to confirm an end of corrective phase and shift near-term focus lower. However, markets remain cautious of possible SNB's intervention, as the central bank may take an action and weaken overvalued franc.

Res: 0.9700; 0.9728; 0.9769; 0.9800
Sup: 0.9668; 0.9657; 0.9640; 0.9612