- A softer US dollar weighs on USD/CHF by almost 1%.
- A bearish engulfing candlestick pattern magnified USD/CHF’s 200-pips decline.
- In the short term, USD/CHF is biased to the downside and may test 0.9300.
The USD/CHF is falling sharply, extending its losses to two days in a row after hitting a fresh two-week high of 0.9600, near the 200-day exponential moving average (EMA) at 0.9628. Failure to recover the former deepened the fall by 200 pips. Therefore, USD/CHF is trading at 0.9430 and losing almost 1%.
USD/CHF Price Analysis: Technical Outlook
The daily chart of USD/CHF shows the formation of a bearish candle diagram pattern created with Monday and Tuesday USD/CHF rates. On Wednesday, the major continued its downward path after printing a daily high of 0.9533, right on the 23.6% Fibonacci retracement defended by sellers, as shown by USD/CHF’s 100-pip drop. Although the Relative Strength Index (RSI) followed suit, it stagnated in bearish territory, opening the door for consolidation.
In the short-term, USD/CHF collided with the 50-time exponential moving average (EMA) around 0.9488 and a downtrend line has been drawn since early November. US dollar (USD) buyers, failing to break above 0.9500, therefore put the pair under selling pressure.
Therefore, the first support USD/CHF will be 0.9400, followed by the November 15 swing low at 0.9356. Decisive break will reveal 0.9300. On the upside, USD/CHF’s key resistance lies at 0.9500, which could open the door towards 0.9600 and beyond once it breaks.