- USD/CHF bulls and bears battle it out below trendline resistance.
- From a 4-hour perspective, 0.9020, 0.9060 and 0.9120 are key milestones.
As per the prior analysis, USD/CHF Price Analysis: Bullish correction eyed, but bears to commit below 0.9150, the bears moved into the market following the correction and the following will illustrate that a downside bias still remains.
USD/CHF prior analysis
Meanwhile, the daily chart showed that the bears had broken structure as follows:
The bears were meeting prior support of 0.9060 and had pierced the level to 0.9055. It was argued that a correction could be due but explained that once the bears committed below 0.9150, the likelihood would be for a downside continuation as per the weekly support area.
As illustrated, the price has continued lower as forecasted, and given that it remains on the front side of the downtrend, the bais stays bearish for the foreseeable future:
USD/CHF live daily chart
With that being said, there is still room for the upside into the trendline resistance.
USD/CHF H4 chart
From a 4-hour perspective, 0.9020, 0.9060 and 0.9120 are key milestones.
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The USD/CHF pair is trading dangerously close to the bearish trendline resistance, as bearish pressure continues to tighten. The pair is experiencing strong selling pressure from the USD side, resulting in a bearish outlook for the next few sessions.
From the technical perspective, the pair is trading close to the 0.8900 mark and struggling to hold on as resistance develops around the bearish trendline. This resistance has been in place since late February and is currently keeping a lid on any major uptrends. The support line is located at 0.8850, which will be the line of defense for the pair.
On the other hand, the relative strength index (RSI) is trading below the 50 mark, reinforcing the bearish outlook. The stochastics oscillator is also indicating a bearish momentum and is currently trading in the oversold region. Similarly, the Moving Average Convergence Divergence (MACD) is generating bearish signals, as it continues to trend below the zero line.
In conclusion, the USD/CHF pair is trading dangerously close to the bearish trendline resistance. With the RSI, stochastics oscillator, and the MACD all pointing to a bearish direction, the pair could be set for more losses in the near term. Traders should watch for a break and a daily close below the resistance line. A retest of the0.8850 level of support could be in the cards once the trendline is breached.