USD/CHF Technical Analysis: Upward Trend Losing Momentum
USD/CHF Technical Strategy
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Since mid-April USD has been rallying against most major currencies, including the CHF, due to better than expected economic data (Retail Sales and GDP Q1) easing FED concerns about current economic growth levels. Markets will be waiting tomorrow for the latest US interest rates decision with no change expected. How will this affect USD/CHF?
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USD/CHF Daily Price Chart (Aug 2018 – April 30, 2019)
Bearish Developments and Levels to Keep in Focus
Since March 20th USD/CHF has been pushing higher and breaking significant resistance levels, however the most important development was on April 18th when prices broke through Nov 13th high at 1.0128 and continued rallying to print 1.0239 on April 26th, its highest levels since nearly 2 and a half years.
On Tuesday April 23rd USD/CHF prices broke a significant level at 1.0215 but failed to close above, and this failure was repeated five times in the following days, to highlight a weakness in the uptrend momentum, which also shows on RSI reading dropping from 80 to 76 considering that any fall in RSI reading below 70 would uphold the bearish bias.
Today April 30th prices are testing the up-trend line originated from the 10th Jan Low and if prices break and remain below 1.0184 then any sell off would eye the end of the range at 1.0134. Support levels at 1.0167 – 1.0161 and 1.0148 -1.0143 should be monitored along the way.
What if USD/CHF closes above 1.0215?
In this case, bullish sentiment would suggest a draw towards 138 .20% Fibonacci extension at 1.0285, if the move breaks resistance levels as 1.0230, 1.0255, 1.0278 first.
USD/CHF Prices 2 Hour Chart (April 30 2019)
We notice a formation of a Double Top pattern where the neck line resides at 1.0169, and prices might swing lower towards 1.0109 if USD/CHF breaks through and remains trading below. Support at 1.0128 also needs to be watched.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
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