USDCHF Outlook: Initial signs of reversal

Slobodan Drvenica Windsor Brokers

USDCHF

The pair holds in red on Tuesday, as risk aversion increased demand for safe haven assets and boosted Swiss franc. Reversal pattern is developing on daily chart, as fresh weakness emerges after triple-Doji signaled that larger bulls stall at strong 0.9980 resistance zone (Aug former highs) and on approach to psychological parity level. Weakening daily studies support the idea as RSI and slow stochastic turned south after forming bearish divergence and 14-d momentum is approaching negative territory. Fresh weakness eyes support at 0.9925 (10SMA/Fibo 38.2% of 0.9847/0.9979 upleg), break of which would generate initial bearish signal and open way towards next pivots at 0.9898 (Fibo 61.8%) and 0.9889 (rising 20SMA). Key near-term support lays at 0.9847 (15 Oct trough). Alternatively, sustained break above 0.9980/1.0000 pivots would generate bullish signal for continuation of larger uptrend from 0.9542 (21 Sep low).

Res: 0.9980; 1.0000; 1.0043; 1.0068
Sup: 0.9938; 0.9925; 0.9889; 0.9847

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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