USD/CHF Price Outlook: Tests Critical Trendline Resistance Level
USD/CHF Technical Forecast
- The US dollar recovers ground on the back of coronavirus updates
- USD vs CHF resumes bearish price action
USD/CHF Price – Bears Pullback
Last week, USD/CHF declined to an over one week low at 0.9426 and closed on Friday the weekly candlestick in the red with a 0.3% loss. Alongside that, the Relative Strength Index (RSI) fell from 47 to 38 highlighting that bears were in charge.
This week, the accelerating numbers of coronavirus infections in the US increased concerns that another lockdown could pause the economic recovery and slowed down the greenback selloff.
USD/CHF Daily Price Chart ( Sep 20, 2018 – July 10, 2020) Zoomed Out
USD/CHF Daily Price Chart (MAY 7 – July 10, 2020) Zoomed IN
On June 23, USD/CHF corrected its downside trend and traded in a sideways move creating a lower high with a higher low. At the start of this week, the pair declined to the lower trading zone 0.9330 – 0.9438 however, the market rallied yesterday and reflected a weaker bearish sentiment.
A close above the high end of the aforementioned zone signals that the market could rally towards 0.9548 and any further close above that level may encourage bulls to extend the rally towards 0.9640.
On the other hand, any failure in closing above the high end reflects that bearish momentum is still intact and may send USDCHF towards the low end of the zone. Any further close below that level could embolden bears to press towards 0.9181.
USD/CHF Daily Four-Hour Chart (June 7 – July 10, 2020)
On July 2, USD/CHF broke and remained below the uptrend line originated from the June 11 low at 0.9376, and started a downward trend led the price to its lowest levels in a near three months at 0.9362. Any successful break above the downtrend line originated from the July 3 high at 0.9467 would correct the price higher and generate a bullish signal.
Thus, a break above 0.9453 may cause a rally towards 0.9553, while any break below 0.9393 could send USDCHF towards 0.9383. That said, the daily support and resistance levels underscored on the four-hour chart should be watched closely.
Written By: Mahmoud Alkudsi, Market Analyst
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.