USDCHF jumped around 0.7% on Thursday after the SNB delivered another 25 basis points rate cut, lowering interest rate from 1.5% to 1.25%.
The central bank argued its decision by the fact that inflation continues to fall, and economic growth picks up.
Fresh strength is improving the picture on daily chart on initial signal of formation of reversal pattern.
Bulls cracked the first resistance at 0.8905 (200DMA / Fibo 23.6% of 0.9158/0.8826 bear-leg) with close above this level required to validate reversal signal and open way for further recovery, with next targets at 0.8953 (Fibo 38.2%) and 0.8976 (strong barrier, provided by the base of thick daily cloud) expected to come in focus.
Daily studies are mixed and still need more work at the upside to turn to bullish mode.
Caution on failure to clear 200DMA, which would keep the downside at risk, however bear-trap pattern is forming on weekly chart and may underpin the action on weekly close above cracked Fibo support at 0.8883 (38.2% of 0.8332/0.9224).
Res: 0.8915; 0.8953; 0.8976; 0.9000.
Sup: 0.8883; 0.8852; 0.8826; 0.8778.
