USD/CHF Price Analysis: Stops the bleeding at 0.9700 and jumps towards 0.9750 on broad US dollar strength
- The Swiss franc gained more than 2.50% vs. the greenback.
- A dampened market mood and a strong US dollar capped the USD/CHF nosedive in the week.
- USD/CHF Price Forecast: Although the major held a massive loss in the week, it remains upward biased unless USD/CHF bears push the pair below the 0.9700 mark.
The USD/CHF is trimming some of its losses, bouncing off the weekly lows at around 0.9700 and pushing to reclaim 0.9750, amidst a dismal sentiment portrayed by US equities recording losses. Also, broad US dollar strength is a tailwind for the pair, despite hefty losses in the 10-year US Treasury yield, which fell from 3% to 2.785%, near weekly lows. At 0.9762, the USD/CHF is gaining 0.35% and eyes to pierce the 20-DMA at around 0.9827.
From a technical perspective, the USD/CHF tumbled in total 250-pips after reaching parity on May 12. USD/CHF traders would need to be aware that Friday’s uptick spurred a reaction in the Relative Strength Index (RSI), which plunged from overbought levels to the 50-midline, and as of writing, it is aiming up at 51.28.
USD/CHF Price Forecast: Technical outlook
That said, the USD/CHF remains upward biased, as the daily moving averages (DMAs) are still below the spot price. The USD/CHF first resistance would be the figure at 0.9800. A breach of the latter would expose the 20-DMA at 0.9827, followed by March 23, 2020, a daily high at 0.9901, and then the parity.
On the flip side, the USD/CHF first support would be 0.9700. Break below would expose the 0.9600 mark, closely followed by the 50-DMA at 0.9545.
Key Technical Levels
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.
