Going Short on USD/CHF As MAs Continue to Keep It Under Control
USD/CHF has been on a bullish trend for nearly three months, since it reversed from the lows at 0.8550s. This recovery has been due to a large part of the bullish run in US Treasury yields, which has been keeping the USD supported. Since July buyers have been in total control, initially pushing the price above 0.90 and eventually rising past 0.92.
On the larger timeframe charts, moving averages have been serving as support indicators, keeping USD/CHF firmly supported amid pullbacks, such as this one, which has been going on for about a week. The price reversed a week ago and earlier in the European session, USD/CHF was trading down around 0.9030s, continuing its losing trend for a fifth straight day.
The armed crisis in the Middle East is exerting negative pressure on USD/CHF, while the Swiss Franc (CHF) enjoys purchasing demand as a result of its standing as a safe haven currency. Last week we saw some great employment reports from the US, but at the time of writing, the US Dollar Index (DXY) is trading down to 105.85 after following a similar path to this pair. Despite the jump in the US Nonfarm Payrolls (NFP) report that was announced on Friday, the US Dollar (USD) did not benefit and the retreat continued for this pair.
The correction of USD/CHF from 0.9240s is still ongoing. Above we have some modest resistance at around 0.9120, and the intraday bias would become neutral on the upward. But as long as the 0.9243 barrier holds, there is a chance of further decline. After the doji at the top, below the 50 SMA (yellow) on the H1 chart which signaled a bearish reversal, we decided to open a sell USD/CHF signal. The reversal didn’t take too long and this pair is heading for the lows it made during the European session.
USD/CHF Live Chart
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