USD/CHF surged yesterday, breaking above the downside resistance line drawn from the high of the 13th of November. The recovery continued today as well and at the time of writing, the rate looks to be heading towards the 0.9910 resistance zone. The break above the aforementioned downside line may have switched the short-term outlook to a somewhat positive one, but we would like to see a decisive break above 0.9910 before we get confident on larger advances.
If the bulls are strong enough to drive the battle above that key hurdle, then we may see them aiming for the 0.9955 zone, which provided decent resistance from the 19th until the 26th of December. Another move higher, above 0.9955, could encourage buyers to add to their positions and may set the stage for the 0.9985 area, or the psychological round figure of 1.0000.
Turning attention to our short-term oscillators, we see that the RSI moved closer to its 70 line but has now started to slow down. The MACD, although above both its zero and trigger lines, shows signs of slowing down as well. These indicators make us cautious of a possible setback before the next leg higher, perhaps for the rate to test the aforementioned downside line as a support this time.
In order to start examining whether the bulls have abandoned the field, we would like to see a clear dip below 0.9850. Such a dip will throw us to the sidelines and may open the path for the 0.9800 obstacle. That said, the move after which we will start leaning to the bearish side is a dip below 0.9790. Such a move may allow the rate to slide all the way down to the low of the 10th of January, at around 0.9715.
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Copyright 2019 JFD Group Ltd.
Copyright 2019 JFD Group Ltd.