USD/CHF Price Analysis: Bearish continuation hinges on 0.8566 eight-year low

USD/CHF drops 3%, RSI suggests potential recovery, past 0.8700, as a bullish-engulfing pattern could form.
USD/CHF’s bearish extension hinges on breaking 0.8566 support.

Christian Borjon Valencia FXStreet

USDH/CHF regains some composture after plummeting more than 3% in the week, breaking technical support levels due to overall US Dollar (USD) weakness across the Forex (FX) board. Slow inflation in the United States (US) triggered market players to pare bets the US Federal Reserve (Fed) will tighten monetary conditions past the Fed July meeting. Hence, the greenback weakened and, against the Swiss Franc (CHF), lost more than 250 pips. The USD/CHF is trading at 0.8622 after reaching a new eight-year low of 0.8566.

USD/CHF Price Analysis: Technical outlook

From a technical standpoint, the USD/CHF is suggested to continue downwards. Still, the Relative Strength Index (RSI) indicator, hitting an extreme 21.47 reading, jumped and is about to cross above the 30 line. That, along with the three-day Rate of Change (RoC) portraying sellers are beginning to lose momentum, could pave the way for the USD/CHF to recover some ground.

If USD/CHF buyers reclaim the 0.8700 figure, that could form a bullish-engulfing candlestick pattern, opening the door for an upward correction. Still, the USD/CHF will remain downward biased unless traders push prices past the 200-day EMA at 0.9179.

A bearish continuation will resume once USD/CHF sellers drag prices below 0.8566, exposing the 0.8500 mark, followed by the 0.8400 figure, ahead of diving towards the 2015 yearly low of 0.8300.

USD/CHF Price Action – Daily chart

USD/CHF

Overview
Today last price	0.862
Today Daily Change	0.0032
Today Daily Change %	0.37
Today daily open	0.8588

Trends
Daily SMA20	0.8911
Daily SMA50	0.8971
Daily SMA100	0.9048
Daily SMA200	0.9259

Levels
Previous Daily High	0.8676
Previous Daily Low	0.8582
Previous Weekly High	0.9005
Previous Weekly Low	0.8876
Previous Monthly High	0.912
Previous Monthly Low	0.8902
Daily Fibonacci 38.2%	0.8618
Daily Fibonacci 61.8%	0.864
Daily Pivot Point S1	0.8555
Daily Pivot Point S2	0.8522
Daily Pivot Point S3	0.8462
Daily Pivot Point R1	0.8648
Daily Pivot Point R2	0.8708
Daily Pivot Point R3	0.8741

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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