USD/CHF Price Analysis: Jumps after hitting a YTD low on RSI-Price action divergence

USD/CHF may be headed for an upward correction despite touching new lows.
If buyers reclaim the 20-Day EMA at 0.8955, further upside is expected in the USD/CHF pair.
USD/CHF at a brisk of falling towards 0.8800, once it falls beneath 0.8819.

Christian Borjon Valencia FXStreet

The Swiss Franc (CHF) strengthened to a new high of the year against the US Dollar (USD), as the USD/CHF dropped towards 0.8819, the year-to-date (YTD) low, as risk aversion hit the markets. Nevertheless, the USD shrugged off its earlier losses, and the USD/CHF pair reversed its course, holding gains. At the time of writing, the USD/CHF is trading at 0.8858 and has gained 0.20%.

USD/CHF Price Action

Although the pair touched new lows, and the USD/CHF price action fell to a lower low, technically speaking, the USD/CHF might be headed for an upward correction. The Relative Strength Index (RSI) indicator is in bearish territory, though it has printed a series of successive higher troughs on each USD/CHF’s lower low. Therefore, a positive divergence is emerging, which could pave the way for further upside.

For that outcome to happen, USD/CHF buyers must reclaim the 20-day EMA at 0.8955. Once cleared, the pair must rally above the May 2 high, at around 0.9000. A decisive break of the figure would expose another resistance level at the 50-day EMA at 0.9067 before buyers can claim 0.9100.

Conversely, if USD/CHF collapses below 0.8819, a fall towards 0.8800 is on the cards.

USD/CHF Daily Chart

USD/CHF

Overview
Today last price	0.8858
Today Daily Change	0.0020
Today Daily Change %	0.23
Today daily open	0.8838

Trends
Daily SMA20	0.8955
Daily SMA50	0.9136
Daily SMA100	0.9192
Daily SMA200	0.9437

Levels
Previous Daily High	0.8932
Previous Daily Low	0.8833
Previous Weekly High	0.8976
Previous Weekly Low	0.8852
Previous Monthly High	0.9198
Previous Monthly Low	0.8852
Daily Fibonacci 38.2%	0.8871
Daily Fibonacci 61.8%	0.8894
Daily Pivot Point S1	0.8803
Daily Pivot Point S2	0.8769
Daily Pivot Point S3	0.8704
Daily Pivot Point R1	0.8902
Daily Pivot Point R2	0.8967
Daily Pivot Point R3	0.9001

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.

AUD/USD sticks to neutral bias above 0.7100 amid cautious markets

AUD/USD holds steady above 0.7100 in the Asian session on Monday as the US Dollar stalls its modest pullback from the highest level since late July amid persistent geopolitical uncertainties. The PBOC status quo on Loan Prime Rates also weighs on the Aussie. However, bets on another RBA rate hike continue to underpin the Australian Dollar ahead of the Trump-Xi Summit.

USD/JPY eases below 157.00 amid looming intervention risks

USD/JPY is easing back below 157.00 in Asia on Monday, undermined by modest Japanese Yen strength amid looming intervention risks after Friday's BoJ rate check. A Japanese holiday also keeps traders on edge amid escalating geopolitical tensions between Russia and Ukraine and in the Middle East. As a result, the US Dollar pauses its pullback, limiting the pair's downside.

Gold remains depressed around $4,350 amid rate jitters, modest USD strength

Gold maintains its offered tone through the first half of the European session, and currently trades around $4,350, down over 0.50% for the day. The commodity, however, holds comfortably above a six-week low, touched last Wednesday as traders await further developments around the Middle East crisis and their implications for inflation. This, in turn, would influence interest rate expectations and, in turn, drive the non-yielding bullion.

Bitcoin hits $85,000 for the first time in eight months

Bitcoin price reclaims $85,000 on Monday, advancing last week’s 5% recovery toward an eight-month high. The recovery in King Crypto aligns with renewed institutional demand, with Exchange Traded Funds (ETFs) recording $433 million in inflows on Friday.

The week ahead: Fuel prices in focus as we lead up to key eco releases

Financial markets are in a strange position as we move to the final weeks of Q3, uncertainty and volatility continue to grip markets, but the oil price is falling; and European and US stocks are poised to open higher later on Monday. Market stresses are concentrated in sovereign bonds, and European and US yields had another scare late on Friday, and moved higher.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.