USD/CHF Price Analysis: Struggles to extend recovery above 0.9140-0.9160 supply zone

The USD/CHF pair has rebounded after a corrective move to near 0.9115 in the early Asian session. The Swiss franc asset is struggling to stretch an upside rally further as the US Dollar Index (DXY) has turned sideways ahead of the United States Nonfarm Payrolls (NFP) data.

Meanwhile, a hawkish commentary from Swiss National Bank (SNB) Chairman Thomas J. Jordan failed to strengthen the Swiss Franc bulls. SNB’s Jordan confirmed more interest rate hikes as inflationary pressures are stronger than the central bank can tolerate. The SNB is ready to be active in currency markets when necessary.

S&P500 futures have dropped sharply in the Asian session after a three-day winning spell, portraying a sheer decline in investors’ risk appetite. The 10-year US Treasury yields have dropped below 3.40%.

USD/CHF displayed a stellar recovery after testing previous lows plotted from January 18 low at 0.9085 on an hourly scale. The recovery action was extremely solid as it pushed the asset above the 20-and 50-period Exponential Moving Averages (EMAs) at 0.9120 and 0.9130 respectively in no time.

The Swiss franc asset has reached near the supply zone in a 0.9140-0.9160 range. It would be optimal to observe the price action around the supply range before making any constructive position.

Also, the Relative Strength Index (RSI) (14) is struggling to scale into the bullish range of 60.00-80.00. An occurrence of the same will trigger the upside momentum.

For further upside, the major needs to deliver a confident move above the 0.9140-0.9160 supply zone, which will drive the asset toward January 18 high at 0.9246 followed by January 24 high at 0.9280.

On the flip side, a breakdown of Wednesday’s low at 0.9059 will drag the major toward 4 August 2021 low at 0.9018. A slippage below the latter will drag the asset further toward 10 May 2021 low at 0.8986.

USD/CHF hourly chart