Swiss Franc Technical Forecast – Talking Points
- USD/CHF momentum appears healthy after it runs to highest level since July 2020
- Bearish divergence in the 8-hour chart’s Relative Strength Index a point of concern
- Further upside appears to be the path of least resistance with Fib extension in focus
The Swiss Franc has depreciated significantly against the US Dollar in recent weeks. USD/CHF appears primed to continue its run higher as the quarter ends. Month-to-date, USD/CHF is nearly 4% higher, extending February’s 2.06% gain to the pair’s highest level since July 2020. That was when the Greenback sold off violently against the Franc amid Covid-induced Greenback weakness..
USD/CHF’s most recent leg higher stemmed from a short period of consolidation that formed a Descending Triangle pattern. Upside accelerated once the descending trendline of that pattern was decisively broken, with support from the 20-day Simple Moving Average (SMA) helping to guide prices higher.
Moreover, trendline support from the February swing low appears to have provided a layer of confluent support. That said, the 20-day SMA and the February trendline may help underpin prices during the next move lower. To the upside, the 161.8% Fibonacci extension level serves as an upside price target. While the Relative Strength Index (RSI) is showing some bearish divergence, MACD remains above its signal line, indicating healthy momentum.
USD/CHF 8-Hour Chart
Chart created with TradingView
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--- Written by Thomas Westwater, Analyst for DailyFX.com
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