USD/CHF Price Analysis: Bears are lurking at neck line resistance
- USD/CHF bulls are tiring at a key resistance level.
- USD/CHF meets a 50% mean reversion level with 0.9050 now in focus.
USD/CHF is down 0.35% after the Swiss National Bank moved forward with a 50bps increase in borrowing costs as expected last week, citing a renewed rise in inflationary pressure and discarding the recent turmoil in the banking sector and the Credit Suisse takeover.
The SNB noted that measures announced by the federal government, FINMA, and the SNB had put a halt to the crisis and reiterated it was providing large amounts of liquidity assistance in Swiss francs and foreign currencies, backed by collateral and subject to interest.
Meanwhile, inflation in Switzerland unexpectedly climbed to 3.4% in February, overshooting market expectations of 3.1% and SNB forecasts of 3%.
Technically, the price is capped by a 50% mean reversion as the following illustrates:
USD/CHF daily chart
The M-formation is a reversion pattern and the neckline is currently holding.
With resistance at a 50% mean reversion level, the bias is to the downside with 0.9050 in focus.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
