Technical Analysis – USDCHF breaks uptrend line, but negative bias not confirmed yet

Marios Hadjikyriacos, XM Investment Research Desk

USDCHF penetrated below a medium-term uptrend line drawn from the August lows, with the bears picking up significant momentum. However, the price structure on the daily charts still appears neutral, with trading action taking place between 1.0000 and 0.9840 in recent months. A clear close below the 0.9840 zone is needed to turn the bias negative.

Short-term oscillators concur with the darkening picture. The RSI has pierced below its neutral 50 zone and is pointing lower, while the MACD – although still positive – just crossed under its red trigger line.

If the bears stay in control and push the pair below 0.9840, the door could open for a test of the 0.9800 handle initially, with even steeper declines potentially finding support near the 0.9710 area.

On the upside, a recovery would likely stall near the 0.9930 – 0.9945 territory, which is where the 50- and 200-day simple moving averages (SMAs) are located respectively, alongside the middle Bollinger band. If buyers overcome that region, the attention would turn next to the 1.0000 psychological hurdle.

In sum, the picture is still neutral. The sellers have to pierce decisively below the 0.9840 zone for the bias to turn bearish.