USD/CHF has been drifting lower since Monday, when it hit resistance near the 0.9795 barrier, also marked by the high of April 3rd. The pair has started printing lower highs and lower lows, while at the time of writing, it is hovering above yesterday’s low of 0.9645, which also provided intraday support on April 1st. Having all these technical signs in mind, we see decent chances for this exchange rate to continue drifting south for a while more.
If the bears are strong enough to overcome the 0.9645 hurdle, we could see them aiming for the low of April 1st, at around 0.9600, soon. If they are not willing to stop there, then a break lower could carry larger bearish implications, perhaps setting the stage for the psychological area of 0.9500, which acted as a decent support on March 27th and 30th.
The RSI and the MACD detect downside momentum and support the notion for some further near-term declines. The RSI runs slightly above 30, and has recently turned down again, while the MACD lies slightly below both its zero and trigger lines, pointing south as well.
In order to start examining whether the bulls have taken control, we would like to see a strong recovery above 0.9795. Such a move would not only confirm the break above the downside line drawn from the high of March 22nd, but also a forthcoming higher high on the daily chart. The bulls may get encouraged to drive the action towards the peak of March 24th, at 0.9845, the break of which may allow extensions towards the 0.9900 territory, defined as a resistance by the peaks of March 21st and 22nd.
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