Technical Analysis – USDCHF eyes 1.000 level for fresh direction

Christina Parthenidou, XM Investment Research Desk

USDCHF managed to pierce the 1.0000 mark after four months before pulling back into the 0.9900 region, questioning the sustainability of the downtrend from the 1.0234 peak.

The sideways move in the RSI and the MACD’s location reflect a neutral-to-positive bias for short-term trading.

Should the bulls finish comfortably above the 1.0000 barrier, traders could speculate that the downward pattern from the 1.0234 peak has likely reached a bottom, with the price crawling next up to the 1.0097-1.0123 familiar resistance area. Further up, the market would need to surpass 1.0160 to rally towards the 1.0234 top.

Alternatively, a break below 0.9900 could find support near the 50-day simple moving average (SMA) currently around 0.9850. Another downside correction may then challenge the 23.6% Fibonacci of 0.9793 of the bearish wave from 1.0234 to 0.9658, while beneath that, 0.9700 should be the next target.

Meanwhile in the medium-term picture, the pair is likely to keep a neutral status as long as it trades between 1.000 and 0.9658.

In short, a rally above 1.000 could potentially bring more meaningful bullish prospects for USDCHF both in the short and the medium-term.