Technical Analysis – USDCHF slips to 15-month low; oversold signals strengthen

Christina Parthenidou, XM Investment Research Desk

USDCHF having cracked below the 2019 trough in the last minute in December it ticked to 15-month low of 0.9612 on Friday.

The bearish short-term bias remains intact but oversold signals are strengthening now as the RSI is testing the 30 level and the Stochastics are diving below 20, while the price itself is already close to the lower Bollinger band, all hinting that the negative action may be running out of steam.

The middle Bollinger band currently at 0.9729 could cape upside corrections as it did from December onwards. In case it leaves the door open, the bulls could pick up steam to meet resistance near the 50-day simple moving average (SMA) that is currently placed near the upper Bollinger band and the 0.9830 level. If the 200-day SMA at 0.9940 is breached too, then a retest of the 0.9994-1.0027 region could happen.

Beneath the 0.9612 trough there is another obstacle at 0.9540, a break of which may confirm additional losses probably towards the 0.9430 tough barrier that strongly rejected upward movements during the 2016-2018 period.

Meanwhile in the medium-term window, the negative outlook deteriorated after the market marked another lower low below 0.9658, with the falling 50-day SMA that failed to climb above the longer-term 200-day SMA backing the bearish view.

In short, USDCHF is bearish overall with the potential for an upside correction in the short-term.