After hitting 1.0095 level on Wednesday, USD/CHF reversed 180 degrees and moved south. That level carries significance, as it was the area that held the rate down since mid-March of last year. Today, the pair broke the short-term tentative upside support line taken from the low of the 15th of August but retraced back up after the US NFP data. That said, as long as the pair continues to trade below the above-mentioned upside line, we could see a bit more downside.
If USD/CHF struggles to get back above the aforementioned short-term tentative upside support line, the bears could take this opportunity to jump in again leading the pair back down towards the 0.9960 barrier, a break of which could confirm a new forthcoming lower low after the yesterday’s reversal. USD/CHF could easily travel lower to test the 0.9922 zone, marked by the intraday low of the 18th of October. This is where the pair could meet the 200 EMA as well, but if the bear-pressure remains strong, a further decline could lead towards a test of the 0.9860 hurdle, or even the 0.9850 line, which is marked the low of the 15th of October.
After the RSI peaked near 80 yesterday, it managed to come down below 50 and seems to be heading towards the 20 zone. The MACD has entered the negative area, it is below the trigger line and points to the downside. Both indicators support the above-mentioned idea.
Alternatively, A move back above the aforementioned short-term upside support line and a break above the 1.0035 obstacle may invite the bulls back to the table and lead USD/CHF back up towards the recent highs. The important resistance level to watch again would be the 1.0095 barrier that was tested Wednesday. If that barrier is not able to withhold the rate from accelerating further, a new target could show up on our radar, which is the 1.0116 zone, marked by the high of the 13th of March last year.
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