The USD/CHF pair recovers over 50 pips from the daily low and now trades just below the 0.9300 mark during the early North American session, still down around 0.45% for the day.

The Swiss Franc initially reacted positively and forced the USD/CHF pair to reverse a part of the previous day's huge rally after Credit Suisse announced that it will exercise an option to borrow up to $54 billion from the Swiss National Bank (SNB) to shore up liquidity. The early optimism, however, fades rather quickly as the markets are still trying to determine whether fears of a systemic crisis have been tamed.

In doing so, the Swiss currency pair retreats from the 100-bar Simple Moving Average (SMA) amid the overbought RSI conditions. Adding strength to the latest pullback could be the global policymakers’ recent announcements to tame the financial market risks, especially after the Credit Suisse turmoil.

It’s worth noting, however, that the bullish MACD signals challenge the USD/CHF bears, which in turn highlights the importance of the 200-SMA level of 0.9270 as the key support. That said, the pair sellers also need validation from the 0.9300 immediate support.

In a case where USD/CHF breaks the 200-SMA support, the odds of witnessing a slump towards the 50% and 61.8% Fibonacci retracement levels of February-March run-up, respectively near .9250 and 0.9200, can’t be ruled out.

Alternatively, the 100-SMA and the previous support line from early February, close to 0.9325 and 0.9350 in that order, restrict short-term USD/CHF upside.

Following that, a run-up towards crossing the double tops near 0.9435-40 appears more likely.

To sum up, USD/CHF is expected to pare recent gains but the downside room seems limited.

USDCHF has broken below a major trend line

Mar 16 2023