Sage Investment Club

  • USD/CHF picks up bids to extend the previous day’s rebound from weekly low.
  • Convergence of 200-SMA, support-turned-resistance line and a descending trend line from early January appears tough nut to crack for bulls.
  • Impending bull cross on MACD, sustained bounce off 23.6% Fibonacci retracement suggest further recovery.

USD/CHF grinds higher past 0.9200, mildly bid while extending the previous day’s rebound from the week’s low during early Friday. In doing so, the Swiss currency pair rebounds from the 23.6% Fibonacci retracement level of its January 06-18 downside, near 0.9160 by the press time.

It’s worth noting that the looming bull cross on the MACD adds strength to the USD/CHF rebound from 0.9160 support, which in turn signals further advances of the pair.

As a result, the 200-SMA, downward-sloping resistance line from early January and the one-week-old previous support line, close to 0.9255-60, appear the key hurdle for the USD/CHF bulls before retaking control.

In a case where the pair rises past 0.9260, the odds of witnessing a run-up toward the monthly high near 0.9410 can’t be ruled out. However, the 61.8% Fibonacci retracement level near 0.9285 and the 0.9300 round figure may act as intermediate halts during the expected rally.

Alternatively, pullback moves need to conquer the 23.6% Fibonacci retracement level surrounding 0.9160 to retake control.

Following that, a downward trajectory towards the monthly low surrounding 0.9085 can’t be ruled out.

It should be observed, however, that the USD/CHF weakness past 0.9085 makes it vulnerable to declining toward the August 2021 low near 0.9020.

USD/CHF: Four-hour chart

Trend: Limited recovery expected


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