USD/CHF Facing the 50 SMA After the 100 Pip Climb on USD Comeback
USD/CHF has been on a bearish trend for months, as the USD continues to retreat lower on longer term charts on slowing inflation and expectations that the FED will stop with rate hikes soon. As a result, this forex pair headed toward 0.90 late last week, but started to reverse higher from there and today we have seen some decent buying pressure, which is coming from the USD.
This currency pair has gained around 100 pips in value due to the overall bullish momentum we are seeing in the US dollar. Currently, the price has reached the 50 moving average on the H4 chart which stands at around 0.9110 and is testing this level. The 50 SMA has been acting as resistance in March, so if the price breaks above this moving average, Then the downtrend will be put into question. The next target would be the range between 0.9155 and 0.9165, which used to be support during February. If USD/CHF continues to move above this zone, the price could reach the 200 SMA (purple) at around 0.9240.
Although buyers are currently pushing against the resistance target just below the moving average level, the 50 SMA remains a crucial level from a technical standpoint. If the price breaks above this level, it must remain above it to confirm a sustained upward trend. In the past, the price has made unsuccessful attempts to break above the moving average level, so a break above this moving average would increase the buyers’ confidence and indicate further potential for upward movement in the currency pair.
On the bigger picture, the outlook for USD/CHF remains bearish as long as the resistance level of 0.9440 holds. The bearish trend from the high of 1.1046whch was reached in 2022 is still ongoing, but at the moment buyers are in control as the USD tries to make a comeback after the recent retreat.
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