Technical Analysis – USDCHF’s range-trading phase might have run its course
June 28, 2023 1:25 pm
USDCHF is edging higher today, bouncing off the key support area of 0.8931. The pair has been hovering between this support level and the 50-day simple moving average (SMA) for the past 10 sessions, reflecting a delicate balance among market participants. The long-term bearish trend, which has been in place since the October 2022 high, remains intact but a lower low is needed soon.
The momentum indicators confirm the cautious trading conditions. The Average Directional Movement Index (ADX) is stuck below its 25-threshold, signaling a range-trading market, and the RSI remains a tad below its 50-midpoint. The stochastic oscillator is once again more interesting as it is currently trying to break below its moving average and enter its oversold territory. Such a move would open the door to another sell-off; alternatively, a jump higher would be seen as a bullish signal.
Should the bears remain in control of the market, they would try to quickly break the February 24, 2012 low at 0.8931. They could then test the support set by the May 4, 2023 low at 0.8819 with the next key level being a tad lower at 0.8757.
On the other hand, the bulls are keen on clearing 0.8975 and engineering a more aggressive move higher. The busy 0.9055-0.9071 range, defined by the May 7, 2015 low, the 100-day SMA and the 78.6% Fibonacci retracement of the January 6, 2021 – October 21, 2022 uptrend respectively, awaits them. Overcoming the resistance area would be a very strong signal from a sentiment perspective.
To sum up, USDCHF bears appear to be taking a breather after a significant sell-off. However, a decisive close above 0.8975 could open the door to a more significant rally.
USDCHF is edging higher today, bouncing off the key support area of 0.8931. The pair has been hovering between this support level and the 50-day simple moving average (SMA) for the past 10 sessions, reflecting a delicate balance among market participants. The long-term bearish trend, which has been in place since the October 2022 high, remains intact but a lower low is needed soon.
The momentum indicators confirm the cautious trading conditions. The Average Directional Movement Index (ADX) is stuck below its 25-threshold, signaling a range-trading market, and the RSI remains a tad below its 50-midpoint. The stochastic oscillator is once again more interesting as it is currently trying to break below its moving average and enter its oversold territory. Such a move would open the door to another sell-off; alternatively, a jump higher would be seen as a bullish signal.
Should the bears remain in control of the market, they would try to quickly break the February 24, 2012 low at 0.8931. They could then test the support set by the May 4, 2023 low at 0.8819 with the next key level being a tad lower at 0.8757.
On the other hand, the bulls are keen on clearing 0.8975 and engineering a more aggressive move higher. The busy 0.9055-0.9071 range, defined by the May 7, 2015 low, the 100-day SMA and the 78.6% Fibonacci retracement of the January 6, 2021 – October 21, 2022 uptrend respectively, awaits them. Overcoming the resistance area would be a very strong signal from a sentiment perspective.
To sum up, USDCHF bears appear to be taking a breather after a significant sell-off. However, a decisive close above 0.8975 could open the door to a more significant rally.
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