- USD/CHF remains range-bound though it meanders slightly below the 0.9200 figure.
- USD/CHF: If it reclaims the 50-day EMA, it will shift neutral; otherwise, a resumption of the downtrend is likely.
The USD/CHF drops for two consecutive days, though buyers are reclaiming the February 7 daily low of 0.9191, as they are eyeing to reclaim the 50-day EMA at 0.9299. At the time of writing, the USD/CHF exchanges hands at around 0.9200.
USD/CHF Price Analysis: Technical outlook
After dropping beneath 0.9200, the USD/CHF encountered solid support at around 0.9180s, beneath a two-month-old downslope resistance trendline, that turned support. It should be said that the USD/CHF pair is still neutral to downward biased, but with the 20-day Exponential Moving Average (EMA) resting at 0.9215, the USD/CHF could rally in the near term.
Nevertheless, oscillators like the Relative Strength Index (RSI) suggest that a bearish continuation is expected after crossing beneath the 50 mid-line. Contrarily, the Rate of Change (RoC) indicates sideways action.
For the USD/CHF to shift neutral, buyers must reclaim the 50-day EMA at 0.9299. Once that happens, then USD/CHF buyers could be poised to test the 100-day EMA at 0.9416. ahead of the 200-day EMA at 0.9478.
For a resumption of the downtrend, the USD/CHF needs to crack the February 3 daily low of 0.9112, which could pave the way for a retest of the YTD low at 0.9059.
USD/CHF key technical levels
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The USD/CHF currency pair has reclaimed the 0.9200 figure after briefly breaching the 20-day moving average (20-DMA). The pair has been trading in a sideways fashion for the past week and successfully broke the resistance at 0.9205.
Analysts suggest that the break of the 20-DMA was a result of strong dollar demand that was sparked by a rise in U.S. Treasury yields. The pair also benefited from easing concerns over the U.S.-China trade conflict, which have to some extent cooled off in recent days.
The US dollar is now being supported by expectations of further monetary tightening by the U.S. Federal Reserve while the Swiss franc remains range-bound. Additionally, the ongoing risk-on sentiment across the global markets is providing support to the greenback.
Looking ahead, technical analysts are predicting the pair to hold its current level and reach the 0.9250 level in the short to medium-term. However, any further increase in the dollar’s strength could put pressure on the pair, pushing it towards the 0.9400 level.
On the other hand, a further escalation of the trade conflict between the two countries could weigh heavily on USD/CHF and drag the pair back down to 0.9100. The key event to watch for is the upcoming Federal Open Market Committee meeting, which could provide further cues about the future of the U.S. dollar.