Technical Analysis – USDCHF extends retreat after sharp sell-off

USDCHF has been marching higher in the medium-term, creating a profound structure of higher highs and higher lows. However, in the last few sessions the pair has experienced a moderate pullback as the price dived beneath both its 50- and 200-day simple moving averages (SMAs).

The recent retreat is likely to continue as the momentum indicators depict that negative momentum has strengthened. The stochastic oscillator is sloping downwards, while the RSI has flatlined in the negative area. Additionally, the price is currently trading far beneath the Ichimoku cloud.

Should the selling pressure intensify further, immediate resistance could be encountered at the recent low of 0.9100. Piercing through this barrier, the price might dip towards 0,9050 or lower to challenge the 0.9020 level. If the bears overcome these obstacles, the spotlight would turn to the 0.8925 hurdle.

Alternatively, if the bulls retake control, the 0.9160 region that overlaps with the 200-day SMA could act as an initial resistance point. Overcoming this barricade, the price could ascend towards the 0.9240 region. Higher up, the bulls might target 0.9275, before the price tests the 0.9332 region.

Overall, the short-term picture has deteriorated for USDCHF. For that bearish tone to reverse, the price needs to clearly cross above the 0.9275 region.

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