USDCHF resumed negative momentum this week after failing to climb above the 61.8% Fibonacci retracement level of the March rally that started from the 0.9181 bottom.
On the downside there is no key support in sight until 0.9320, hence the sell-off may continue for a bit, with the RSI and the MACD endorsing that bearish view as the former has yet to find a bottom in the oversold area and the latter is strengthening southward again.
A break below 0.9320 would expose the market to the 0.9255 support area, which the price failed to successfully breach in March. Another step lower could see the retest of the almost five-year low of 0.9181, where any violation would put the pair back in a downtrend. In this case, the decline could next stall near 0.9070 – an important barrier during the 2014-2015 period.
On the flip side, an upside reversal should overcome some obstacles before reaching the descending trendline. The 61.8% Fibonacci of 0.9456 and the restrictive 20-day simple moving average (SMA) could first come on the radar ahead of the 50% Fibonacci of 0.9540. Then, the bulls would have to push harder to pierce above the trendline and gear up towards the 200-day SMA and the 23.6% Fibonacci of 0.9730.
In the broader picture, a decisive close above the previous high of 0.9899 could eliminate downside risks and raise buying confidence.
Summarizing, USDCHF is expected to lose some ground in the short-term, with traders likely looking for support near 0.9320.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.