USD/CHF Price Analysis: Inverted Flag advocates a bearish momentum

An Inverted Flag formation is strengthening the Swiss franc bulls.
The 50-period EMA is acting as a major resistance for the counter.
The RSI (14) has shifted into a 40.00-60.0 range which awaits a potential trigger for volatility expansion.

Sagar Dua FXStreet

The USD/CHF pair is oscillating in a narrow range of 0.9650-0.9672 in the Asian session. On a broader note, the asset is oscillating in a 0.9623-0.9732 range from the past four trading sessions after delivering a vertical downside move from a high of 1.0050 recorded last week after the Swiss National Bank (SNB) elevated its interest rates for the first time in the past 15 years. The SNB dictated a 50 basis point (bps) interest rate hike.

The formation of an Inverted Flag chart pattern is indicating more downside after the violation of the inventory re-distribution phase. An inventory re-distribution phase denotes the placement of shorts from those market participants, which prefer to enter a bearish auction after the establishment of a downside bias.

The Swiss franc bulls have defended the 50-period Exponential Moving Average (EMA) at 0.9683. Also, the 200-period EMA is trading above the asset prices at 0.9750, which weakens the greenback bulls.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, which supports a consolidation ahead. A downside move below Friday’s low at 0.9619 will drag the asset towards May 27 low at 0.9545, followed by March 16 high at 0.9460.

On the flip side, the greenback bulls could regain control if the major overstep Friday’s high at 0.9733, which will send the asset towards June 9 high at 0.9817. A breach of the latter will drive the asset towards June 14 low at 0.9874.

USD/CHF hourly chart

USD/CHF

Overview
Today last price	0.9661
Today Daily Change	-0.0010
Today Daily Change %	-0.10
Today daily open	0.9671

Trends
Daily SMA20	0.9713
Daily SMA50	0.9712
Daily SMA100	0.949
Daily SMA200	0.9354

Levels
Previous Daily High	0.9713
Previous Daily Low	0.9622
Previous Weekly High	1.005
Previous Weekly Low	0.9619
Previous Monthly High	1.0064
Previous Monthly Low	0.9545
Daily Fibonacci 38.2%	0.9657
Daily Fibonacci 61.8%	0.9678
Daily Pivot Point S1	0.9625
Daily Pivot Point S2	0.9578
Daily Pivot Point S3	0.9534
Daily Pivot Point R1	0.9715
Daily Pivot Point R2	0.9759
Daily Pivot Point R3	0.9806

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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