• The formation of a Spring has pushed the asset inside the woods.
  • A stretched consolidation after a bearish bias indicates inventory accumulation for a bullish reversal.
  • Overlapping 20-EMA with the asset price is indicating a consolidation ahead.

The USD/CHF pair is displaying topsy-turvy moves in the early Tokyo session as the upside in the asset is capped around 0.9300 while the downside is restricted at 0.9250. The Swiss franc asset has turned sideways, defending the risk-appetite theme in the market.

S&P500 witnessed a decent buying interest last week as the result season kicked off. Surprisingly, the 10-year US Treasury yields gained to 3.50%, which has restricted the downside in the US Dollar index (DXY). The USD Index remained in consolidation around 101.76.

USD/CHF has reversed inside the woods after sensing a responsive buying action from the market participants below 0.9200. This has served as a Spring formation, which signifies the case of restricted downside. On a four-hour scale, stretched consolidation in USD/CHF is indicating an inventory accumulation formation, which might result in a bullish reversal ahead.

The 20-period Exponential Moving Average (EMA) at 0.9277 is overlapping with the asset price, which indicates a consolidation ahead.

Also, the Relative Strength Index (RSI) (14) is oscillating in the bullish range of 40.00-60.00, which indicates that the asset awaits a key trigger for a decisive move.

Going forward, a break above January 11 high at 0.9332 will drive the asset towards December 12 high at 0.9363 followed by the round-level resistance at 0.9400.

Alternatively, a slippage below Monday’s low at 0.9167 will result in a fresh downside journey toward March low at 0.9150. A downside move below March low will expose the asset to January 17 low at 0.9117.

USD/CHF four-hour chart


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