USD/CHF skyrocketed yesterday, breaking above the 0.9375 key barrier, which had been preventing the pair from moving higher since March 18th. This, combined with the fact that there is an upside line supporting the price action taken from the low of March 31st, paints a positive short-term picture in our view.

At the time of writing, the rate seems to be oscillating slightly below another key resistance zone, at around 0.9460, marked by the peak of March 16th. That zone stopped the rate from climbing higher back on April 1st, 2021, and July 16th, 2020, as well. The bulls may decide to take a break after testing that zone, or even before that happens, thereby allowing a downside correction. However, we see a decent likelihood to use the 0.9375 territory as a rebound zone this time, which could encourage them to climb above the 0.9460 obstacle. Such a break could carry larger bullish implications, perhaps paving the way towards the 0.9555 area, defined as a support by the high of June 12th, 2020.

Taking a look at our short-term oscillators, we see that the RSI turned down and exited its above-70 zone, while the MACD, although above both its zero and trigger lines shows signs that it could top soon as well. Both indicators detect strong upside speed, but also hint a potential slowdown, which supports the notion for a setback before the next leg north.

On the downside, we would like to see a clear dip below 0.9325, marked by the low of April 14th, before we start examining a bearish reversal. This could confirm the break below the upside line taken from the low of March 31st, and perhaps initially target the low of April 12th, at 0.9287. If the bears get encouraged to add to their positions, then a break lower could see scope for larger declines, perhaps towards the low of April 5th, at 0.9237. Slightly lower lies the 0.9195 barrier, marked by the low of March 31st, which could get tested in case the 0.9237 zone doesn’t hold.

USDCHF Dependent Upon Strength From DXY

Apr 16 2022