- The US Dollar strengthens across the FX space, a tailwind for the USD/CHF.
- USD/CHF Price Analysis: Shifted to neutral biased once buyers hurdle the 20-DMA.
The USD/CHF is surging sharply during Friday’s North American session, as Wall Street is set to finish the last trading day of the week with losses. Therefore, the USD/CHF is trading at 0.9260, above its opening price by 1.42%.
USD/CHF Price Analysis: Technical outlook
On Friday, the USD/CHF rally broke two downslope resistance trendlines, which would pave the way for further losses. In addition, the 20-day Exponential Moving Average (EMA) at 0.9210 was reclaimed during the uptrend, exposing crucial resistance levels, which, once cleared it, could pave the way for further gains.
The USD/CHF first resistance will be the January 31 daily high at 0.9288. A breach of the latter and the 0.9307, the 50-day EMA is up for grabs., followed by January’s 12 high at 0.9360.
On the flip side, the USD/CHF first support would be the 20-day EMA at 0.9210. Bears reclaiming the latter would exacerbate a fall below 0.9200, followed by the February 3 daily low at 0.9112.
USD/CHF Key Technical Levels
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The US Dollar (USD) is showing signs of strength against the Swiss Franc (CHF) as the pair has rallied above the 0.9250 level and reclimbed the 20-day moving average (DMA). This price action signals the return of bullishness in the market as investors look ahead to possible further gains in the USD/CHF pair.
In the short-term, the USD/CHF pair is trading higher on the back of improving global sentiment as investors return to riskier assets. Supporting this rally, the pair has seen short-term technical support from the 50-DMA which has provided a steady base for the rally after the overnight dip.
Looking at the technical picture, the pair is testing a key resistance zone around the 0.9270-0.9275 level. A break above this range could open the door for further bullish momentum in the pair towards the 0.9300 handles. Further gains may however be capped by strong resistance around the 0.9350 level.
On the other hand, a failure to break above the 0.9270-0.9275 zone could lead to a pullback towards the 0.9200 mark. A breakdown below the 0.9200 level could open the door to a deeper sell-off, with the 20-DMA providing strong technical support in the event of a bearish move.
In conclusion, the USD/CHF pair has made gains back above 0.9250 and reclaim the 20-DMA as bulls eye the 50-DMA. If the pair can break above the 0.9270-0.9275 range, then the pair has the potential for further gains, however any failure to break this level could trigger a reversal and open up a sell-off.
