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USD/CHF technical analysis: Bulls struggle to extend the recovery beyond 0.9900 handle

  • Renewed US-China trade optimism helped regain some traction.
  • The uptick lacked bullish conviction and warrants some caution.
The USD/CHF pair stalled its recent pullback from levels beyond 200-day SMA and regained some traction on the last trading day of the week. Renewed trade optimism weighed on the Swiss franc’s safe-haven status and led to a modest recovery, though bulls struggled to extend the momentum beyond the 0.9900 handle.

On the daily chart, the pair has been oscillating between two converging trend-lines over the past two months or so and now seemed to have formed a symmetrical triangle.

Meanwhile, oscillators on 4-hourly/daily charts have been recovering but struggled for a firm direction, warranting some caution for aggressive traders.

Given the pair’s repeated failures to find acceptance above a technically significant moving average, the near-term bias might favour bearish traders. However, the fact that the pair has been forming higher lows makes it prudent to wait for a sustained breakthrough the triangle support, currently near the 0.9860-55 region.

The mentioned support also nears 50% Fibonacci retracement level of the 0.9659-1.0027 positive move and should act as a key pivotal point for short-term traders. Below the said support, the pair might turn vulnerable to break below the 0.9800 handle and aim towards testing its next major support near the 0.9720 region.

On the flip side, immediate resistance is pegged near the 0.9925-30 region (23.6% Fibo. level) and is closely followed by mid-0.9900s (200-DMA), which if cleared should assist the pair to make a fresh attempt to reclaiming the parity mark and head towards challenging the 1.0025-30 supply zone in the near term.

USD/CHF daily chart

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USD/CHF daily chart

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Haresh Menghani
Haresh Menghani, Financial Markets Analyst and New Editor, joined FXStreet team after accumulating 8 year of rich experience in analysing global financial markets. Haresh holds Masters degree in Business Administration and Financial Analysis.
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