USD/CHF has been in a rally mode since March 9th, when it hit support at around 0.9185. That said, at the time of writing, the rate is testing the area near 0.9625, which is the lower boundary of the sideways range that was containing the price action from May 31st, 2019, until March 2nd this year. Technically, the bears could take charge from near that hurdle and push for another leg down.
However, we would like to see a dip below the 0.9570 hurdle before we get confident on that front. That zone marks the inside swing high of March 13th. If this is the case, the bears could dive towards Monday’s low, at around 0.9390. If they are willing to overcome that obstacle as well, then we may see them putting the 0.9185 territory back on their radars.
Shifting attention to our daily oscillators, we see that the RSI just poked its nose above its 50 mark, while the MACD, although negative, lies above its trigger line. These mechanical studies make us cautious that some further rebound, back within the range may be possible before the bears take charge again. Perhaps for a test near the 0.9760 zone or the downside line drawn from the high of November 29th.
Having said all that though, in order to turn back to neutral and start examining whether traders want to keep the rate back within the range, we would like to see a break above both the downside line and the 0.9760 barrier. We may then see the recovery extending towards the highs of February 19th and 20th, at around 0.9850, the break of which may open the path towards the highs of December 6th and 9th, near 0.9915. Another break, above 0.9915, could set the stage for the upper end of the pre-discussed range, at around 1.0020.