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
AUD/USD: Further losses retarget the 200-day SMA
Further gains in the greenback and a bearish performance of the commodity complex bolstered the continuation of the selling pressure in AUD/USD, which this time revisited three-day lows near 0.6560.
EUR/USD: Further weakness remains on the cards
EUR/USD added to Tuesday’s pullback and retested the 1.0730 region on the back of the persistent recovery in the Greenback, always against the backdrop of the resurgence of the Fed-ECB monetary policy divergence.
Gold flirts with $2,320 as USD demand losses steam
Gold struggles to make a decisive move in either direction and moves sideways in a narrow channel above $2,300. The benchmark 10-year US Treasury bond yield clings to modest gains near 4.5% and limits XAU/USD's upside.
Bitcoin price dips to $61K range, encourages buying spree among BTC fish, dolphins and sharks
Bitcoin (BTC) price is chopping downwards on the one-day time frame, while the outlook seen in the one-week period is a horizontal trade. In this shakeout moment, data shows that large holders are using the correction to buy up BTC.
Navigating the future of precious metals
In a recent episode of the Vancouver Resource Investment Conference podcast, hosted by Jesse Day, guests Stefan Gleason and JP Cortez shared their expert analysis on the dynamics of the gold and silver markets and discussed legislative efforts to promote these metals as sound money in the United States.