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Swiss Franc Technical Outlook: USD/CHF Aims For Key Level at Multi-Month Highs

Swiss Franc Technical Outlook: USD/CHF Aims For Key Level at Multi-Month Highs

Thomas Westwater, Analyst

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
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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

USD/CHF Chart

Chart created with TradingView

USD/CHF TRADING RESOURCES

--- Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwater on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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