USD/CHF has been trading in a free-fall mode since it turned south on February 21st. The tumble accelerated yesterday, with the rate breaking below Tuesday’s low of 0.9515, while today, it fell below 0.9435, which acted as a decent support between March 13th and 26th, 2018. Now the rate is testing levels last seen on March 7th, 2018 and appears to be heading towards the low of March 4th, the same year.
The bears may eventually test that support zone, or even the next one, at 0.9285, marked by the low of February 20th, 2018, but bearing in mind the overstretched nature of the latest fall, they may decide to take a break afterwards. This may result in a corrective rebound, but as long as such a recovery stays limited below 0.9435, we would see decent chances for the bears to jump back into the action. If the forthcoming negative leg leads the rate below 0.9285, this may pave the way towards the low of February 16th, 2018, near 0.9185.
Shifting attention to our short-term oscillators, we see that the RSI runs below 30 and points down, while the MACD lies below both its zero and trigger lines, pointing south as well. Both indicators detect strong downside speed and corroborate our view for further declines in this exchange rate.
On the upside, we would like to see a strong move back above 0.9625 before we start examining the case of a stronger recovery. This may encourage the bulls to push towards the 0.9770 zone, marked by the inside swing low of February 24th. That area also acted as a decent resistance on January 10th and 29th. If the buyers do not stop there and emerge above that zone, we could see extensions towards the 0.9850 level, defined as a resistance by the high of February 20th, slightly below the downside resistance line drawn from the high of April 26th.