USD/CHF Price Analysis: Further downside towards 0.8700 appears impulsive
- USD/CHF remains pressured at weekly low, extends pullback from 50-DMA, key resistance line.
- Downside break of monthly support line, looming bear cross on MACD also favor Swiss Franc pair sellers.
- One-month-old horizontal support zone appears a tough nut to crack for bears.
- Buyers need successful break of 0.8830 to retake control.
USD/CHF drops to the lowest level in a week while refreshing intraday bottom around 0.8765 heading into Thursday’s European session. In doing so, the Swiss Franc (CHF) pair prints a two-day losing streak by extending the previous day’s reversal from the 50-DMA and a three-month-old descending resistance line.
Not only the failure to cross the key DMA and trend line resistance but a sustained trading beneath the previous support line, which broke on Monday, joins the impending bear cross on the MACD indicator to also keep the USD/CHF sellers hopeful.
With this, the Swiss Franc (CHF) pair sellers approach a one-month-old horizontal support zone surrounding the 0.8700 threshold.
Following that, the 0.8635-30 region will act as the final defense of the USD/CHF buyers before pushing the traders toward the multi-year low marked in July around 0.8552.
Meanwhile, a convergence of the stated DMA and trend line, around 0.8805, restricts the immediate upside of the USD/CHF pair, a break of which could propel the quote towards the previous support line surrounding 0.8825.
However, the quote’s upside past 0.8825 needs validation from the double tops surrounding 0.8830.
Overall, the USD/CHF remains bearish but the room toward the south appears limited.
USD/CHF: Daily chart
Trend: Limited downside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
