After trading above its short-term upside support line for about a month and a half, USD/CHF has broken it and now seems to be able to continue moving lower. At the time of this report, the US dollar index had also turned south, which may partially support the idea of the pair’s further declines. For now, we will take a more bearish approach and target slightly lower areas.
A move below the 1.0029 obstacle, marked by the high of February 7th, could open the door to the re-test of the psychological 1.0000 zone. Of course, at some point we may see a rebound back up, but if the rate remains below the 1.0029 barrier, we may see another leg of selling, which could lead to a drop below the above-mentioned 1.0000 level. This is when more sellers might join in and drive the pair to the 0.9985 hurdle, marked by the low of February 10th.
Taking a quick look at our oscillators, the RSI and the MACD are in support of the above-discussed idea. The RSI is running below 50 and points to the downside. The MACD is also pointing lower and sits below both the zero and trigger lines.
Alternatively, a push back above the aforementioned upside support line and a break above the 1.0070 hurdle could invite more bulls back to the table, as such a move could increase the possibility of seeing a further rate-acceleration. This may drag the pair higher to test the last week’s high, near the 1.0100 level, which if fails to withstand the buying-pressure could push USD/CHF towards the 1.0128 barrier, marked by the high of November 13th.
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