US Dollar Outlook: USD/CHF
USD/CHF clears the February low (0.8913) after failing to trade back above the 50-Day (0.9054), and the exchange rate may continue to give back the advance from the December low (0.8736) as a descending channel takes shape.
USD/CHF Holds Below 50-Day SMA to Form Descending Channel
USD/CHF extends the decline from the start of the week to register a fresh yearly low (0.8556), with the Relative Strength Index (RSI) back at its lowest level since September amid the weakness in the exchange rate.
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In turn, the RSI may show the bearish momentum gathering pace should it continue to approach oversold territory, and a move below 30 in the oscillator is likely to be accompanied by a further decline in USD/CHF like the price action from last year.
With that said, USD/CHF may attempt to test the December low (0.8736) as it carves a series of lower highs and lows, but the exchange rate may consolidate over the remainder of the week as it comes up against channel support.
USD/CHF Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/CHF Price on TradingView
- USD/CHF seems to be trading within a descending channel as it clears the February low (0.8913), with a close below the 0.8880 (38.2% Fibonacci retracement) to 0.8910 (38.2% Fibonacci extension) zone raising the scope for a move towards the 0.8770 (61.8% Fibonacci extension) to 0.8800 (50% Fibonacci extension) region.
- Next area of interest comes in around the December low (0.8736), but USD/CHF may struggle to extend the recent series of lower highs and lows as it comes up against channel support.
- Lack of momentum to close below 0.8880 (38.2% Fibonacci retracement) to 0.8910 (38.2% Fibonacci extension) zone may push USD/CHF back towards the weekly high (0.9031), with a break/close above the 0.9030 (38.2% Fibonacci extension) to 0.9040 (23.6% Fibonacci extension) region negating the descending channel.
Additional Market Outlooks
GBP/USD Eyes December High as Ascending Channel Remains Intact
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Euro Forecast: EUR/USD Vulnerable to ECB Rate Cut
US Dollar Forecast: USD/JPY Rebound Retrained by Slowdown in US PCE
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
