USD/CHF Struggles After Testing Former Support Zone
USD/CHF falls for the second day after testing the former support zone around the April low (0.8040).
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US Dollar Outlook: USD/CHF
USD/CHF falls for the second day after testing the former support zone around the April low (0.8040), and the exchange rate may give back the rebound from the monthly low (0.7872) should it continue to track the negative slope in the 50-Day SMA (0.8132).
USD/CHF Struggles After Testing Former Support Zone
Keep in mind, the recent rebound in USD/CHF pulled the Relative Strength Index (RSI) out of oversold territory, and the exchange rate may consolidate over the coming days as long as the oscillator holds above 30.
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However, USD/CHF carves a series of lower highs and lows as it continues to fall from the monthly high (0.8064), and the recovery from the start of July may turn out to be temporary as the Federal Reserve remains under pressure from the Trump Administration to implement lower US interest rates.
With that said, the US Dollar may continue to deprecate against its Swiss counterpart as Fed officials still forecast that ‘the appropriate level of the federal funds rate will be 3.9 percent at the end of this year,’ and USD/CHF may give back the rebound from the monthly low (0.7872) as it carves a series of lower highs and lows.
USD/CHF Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/CHF Price on TradingView
- USD/CHF struggles following the failed attempt to push back above the former support zone around 0.8030 (38.2% Fibonacci extension) to 0.8080 (23.6% Fibonacci retracement), and a move below 0.7900 (50% Fibonacci extension) may lead to a test of the monthly low (0.7872).
- A move/close below the 0.7760 (61.8% Fibonacci extension) to 0.7810 (161.8% Fibonacci extension) region brings 0.7680 (161.8% Fibonacci extension) on the radar, with the next area of interest coming in around 0.7560 (78.6% Fibonacci extension).
- At the same time, a move/close above the 0.8030 (38.2% Fibonacci extension) to 0.8080 (23.6% Fibonacci retracement) zone may push USD/CHF toward 0.8200 (23.6% Fibonacci extension), with the next area of interest coming in around the June high (0.8250).
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
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