USD/CHF Surges Above a Key Resistance Hurdle

USD/CHF skyrocketed yesterday, breaking above the 0.9375 key barrier, which had been preventing the pair from moving higher since March 18^th. This, combined with the fact that there is an upside line supporting the price action taken from the low of March 31^st, paints a positive short-term picture in our view.

At the time of writing, the rate seems to be oscillating slightly below another key resistance zone, at around 0.9460, marked by the peak of March 16^th. That zone stopped the rate from climbing higher back on April 1^st, 2021, and July 16^th, 2020, as well. The bulls may decide to take a break after testing that zone, or even before that happens, thereby allowing a downside correction. However, we see a decent likelihood to use the 0.9375 territory as a rebound zone this time, which could encourage them to climb above the 0.9460 obstacle. Such a break could carry larger bullish implications, perhaps paving the way towards the 0.9555 area, defined as a support by the high of June 12^th, 2020.

Taking a look at our short-term oscillators, we see that the RSI turned down and exited its above-70 zone, while the MACD, although above both its zero and trigger lines shows signs that it could top soon as well. Both indicators detect strong upside speed, but also hint a potential slowdown, which supports the notion for a setback before the next leg north.

On the downside, we would like to see a clear dip below 0.9325, marked by the low of April 14^th, before we start examining a bearish reversal. This could confirm the break below the upside line taken from the low of March 31^st, and perhaps initially target the low of April 12^th, at 0.9287. If the bears get encouraged to add to their positions, then a break lower could see scope for larger declines, perhaps towards the low of April 5^th, at 0.9237. Slightly lower lies the 0.9195 barrier, marked by the low of March 31^st, which could get tested in case the 0.9237 zone doesn’t hold.