USDCHF staged a remarkable comeback after touching a six-month low of 0.9541 on September 21. In fact, the pair has not experienced a down day ever since, something which amounts to eight straight days of gains, and is currently trading around 400 pips above that nadir. Moreover, it touched a one-and-a-half-month high of 0.9926 earlier on Thursday.
The Tenkan-sen has moved above the Kijun-sen line, which also acts as a testament to the bullish bias in the short-term. However, notice that the Kijun-sen has eased, the implication being that positive momentum may be easing.
Currently at 0.9918, the pair is trading in an area that was congested between mid-June to late August. A conclusive move above may meet resistance around the parity level (1.00) that could hold psychological importance. Further above, 1.0067, the highest since May 2017, would increasingly come within scope.
On the downside, resistance could occur around 0.9858, which is the 23.6% Fibonacci retracement level of the upleg from 0.9187 to 1.0067. The current level of the 100-day (simple) moving average line (0.9861) roughly coincides with this point, while the Ichimoku cloud top (0.9884) and bottom (0.9841) are not far away. Lower still, additional support may come around the 50-day MA at 0.98.
Turning to the medium-term picture, the move above both the 50- and 100-day MAs, as well as above the Ichimoku cloud, has tilted the outlook towards a bullish direction. However, the bullish structure is still fragile given that price action is currently not far above the cloud, with a more conclusive move up needed to solidify the positive view.
Overall, both the short- and medium-term outlooks are looking mostly bullish at the moment.
