Technical Analysis – USDCHF fails to close below crucial support and turns up

Christina Parthenidou, XM Investment Research Desk

USDCHF looks to have bottomed the pullback off the 1.0022 high near the familiar 50% Fibonacci retracement of the 0.9658-1.0026 bullish wave as the RSI and the Stochastics are turning up after hitting oversold levels.

Additional gains could potentially retest the 40-period exponential moving average (EMA) that curbed upside movements last week. Breaking higher and above the 38.2% Fibonacci of 0.9886, recent peaks around 0.9908 could take control ahead of the 23.6% Fibonacci of 0.9940.

Closing decisively below the 50% Fibonacci of 0.9843, the bears would aim for the 61.8% Fibonacci support area of 0.9799, a break of which would likely shift attention towards the 0.9772 barrier. Another leg lower may also find some footing around the 78.6% Fibonacci of 0.9737.

Overall, USDCHF keeps trading in a range since early September and only a remarkable rally above 1.0026 or a decline below 0.9843 would alter that status.

In brief, USDCHF may face upside pressure in the short-term, while in the bigger picture the neutral outlook remains well intact as long as the price holds within the 0.9843-1.0026 area.