Major Test Above 0.91 for USD/CHF – Can the Trend Change?

USD/CHF has been climbing higher for three weeks but now the price is approaching the 100 daily SMA above 0.91 where the real test will be


USD/CHF used to be bearish since its highs in October last year. We noted that any upward bounces were short lived, with the expectation of further downward movement. We suggested that these bounces should fail to develop into extended upward swings, limited to 3, 7, or 11 swings, indicating a continuation of the downward trend.

We did see a retrace during Q1, as the USD recuperated somewhat, but the retrace ended at the 100 SM A(green0 on the daily chart above. This provided an opportunity for sellers to add further on short positions. Eventually, the decline resumed and USD/CHF fell to 0.88 lows.

This was the lowest level since January 2021. After finding support at the bottom, this pair initiated a rally towards the 0.90 resistance. This upward movement was triggered by several US economic indicators in the last two weeks which were positive and exceeded expectations, pushing the market to reassess its outlook on future interest rate odds by the FED.

USD/CHF H4 Chart – The 50 SMA Has Turned Into Support

Dips keep getting bought 

Initially, the market reacted bearishly to the Federal Reserve’s indication of a pause in June. But, the FED also left room for the possibility of another rate hike if the data remained strong. Subsequently, US economic data, including robust NFP figures, a significant increase in long-term consumer inflation expectations, better-than-expected retail sales, favorable jobless claims, and strong Services Purchasing Managers’ Index (PMI), exceeded forecasts.

These positive data points may contribute to higher core inflation for a prolonged period and potentially necessitate further action by the FFED. As a result, USD/CHF is now approaching a breakout of a trendline and the key psychological level of 0.90. Additionally, the moving averages have crossed to the upside, indicating a potential bullish momentum. If conditions remain unchanged, there is a possibility of USD/CHF reaching the 0.91 level in the near future.

USD/CHF Live Chart

USD/CHF
ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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