USDCHF Technical Analysis

The recent policy
divergence between the SNB and the Fed has sent the USDCHF pair lower. In fact,
the Fed has paused its tightening cycle at 5.00-5.25% because it wants to see
more data before making a decision on another rate hike, while the SNB kept on
being hawkish as the Governor Jordan remained adamant on getting inflation down
to target and not backing off now because of the risk of second and third round

USDCHF Technical Analysis –
Daily Timeframe

On the daily chart, we can see that since being
rejected at the 0.9122 resistance and
falling below the trendline, USDCHF
sold off towards the 0.89 handle. The moving averages have
again crossed to the downside, which should be a signal of a change in trend,
and the price has pulled back to the blue 8 moving average, which brings the
trend into more equilibrium.

USDCHF Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that USDCHF is at a
strong resistance zone where we can find a previous swing level, the 38.2% Fibonacci retracement level
and the 0.90 psychological round number. This is
where the sellers should enter the market with a defined risk above the 0.90
handle and target the 0.8858 support.

USDCHF Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price has been trending upwards within a rising channel. The red 21 moving
average has also been acting as dynamic support for the buyers, so a break
below it would spell trouble for them. In fact, if USDCHF breaks to the
downside, we are likely to see more sellers piling in to extend the fall into
the 0.8858 support. The buyers, on the other hand, will need to break above the
0.90 high to pile in with more conviction and target the 0.91 handle.

Today we will hear from Fed Chair Powell as he
testifies to Congress. Tomorrow, we have the SNB policy decision, where the
central bank is expected to hike rates by 25 bps, and later on we will see the
US Jobless Claims. Finally, we conclude the week with the US PMIs on Friday.

This article was written by FL Contributors at Source