USD/CHF: Sustained loss under 0.8984 to augment downside pressure – DBS Bank
USD/CHF's price profile is now under all key moving averages. Benjamin Wong, Strategist at DBS Bank, signals a bearish USD skew and, therefore, expects the pair to break below the 0.8984 mark.
USD bears are returning
“Momentum is starting to pick up for USD/CHF to re-engage to the downside, which aligns to recent demand for the pair of safe haven currencies, JPY and CHF. USD/CHF is now under all key moving averages on the daily chart (a norm for trend behaviour), and has staged a test of the 200-day moving average (DMA) at 0.9074.”
“The moving average convergence/divergence (MACD) signal is USD bearish, but there are two pertinent points to ponder over. Firstly, the tendency is now to sell rallies, referencing 0.9213 as the key resistance. On the downside, USD needs to stage a compression under the former neckline zone, and that means only an attack that busts under 0.9008 would turn out more muscular.”
“A break under the support line from 0.8758 (in green, around 0.8984) is all the market needs to drive USD lower. Look out for a 0.8984 break as a bearish flick of the switch.”
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FXStreet Insights Team
FXStreet
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