USDCHF remains under pressure and the risk is to the downside as prices continue to drift lower from the 38.2% Fibonacci retracement level of the downward wave from 1.0235 to 0.9610 at 0.9850. The revisiting of the 16-month low of 0.9610, suggests the formation of a possible trading range if the price fails to post a lower low in the daily chart.
Looking at momentum indicators, the RSI is heading south and is ready to flirt with the 30 territory, while the MACD has declined beneath the zero line, suggesting more losses.
If prices continue to head lower and break the 16-month low, support should come from the 0.9540 barrier, registered on September 2016. A drop below this level would reinforce the bearish view and open the way towards the 0.9430 mark, taken from the trough on March 2018.
On the flip side, a move to the upside could see resistance at the 40-day SMA at 0.9725 but should the market increase positive momentum above this area, the 23.6% Fibonacci of 0.9760, which overlaps with the 20-day SMA could be the next level in focus. A stronger barrier, though, could be found at the 38.2% Fibonacci of 0.9850 since any strong violation of this point could increase chances for further gains, probably towards the 50.0% Fibo of 0.9925.
Turning to the medium-term picture, the market seems to be in a bearish mode given that the pair is trading below the SMAs and the strong 38.2% Fibo level.
