USDCHF continues to uphold a negative bearing below the declining simple moving averages (SMAs) and the Ichimoku cloud, in spite of its recent bounce near a 5½-year low of 0.9055.
That said, looking at the short-term oscillators they reflect improvements in positive momentum. However, this could prove short lived as the predominant negative SMAs hold their course. The MACD, in the negative area, has slowed below its red trigger line, while the RSI ricocheted off the 30 level. Moreover, the stochastics have turned bullish. Nevertheless, some caution is warranted in case a double bottom formation evolves.
To the downside, if the bears manage to dip below the 5½-year obstruction, the 0.8984 and 0.8933 lows from the end of January 2015 may draw focus. A step underneath could meet the 0.8908 level, that being the 138.2% Fibonacci extension of the up leg from 0.9182 to 0.9900. Should sellers extend the descent, the 0.8835 barrier from January 2015 may come into play.
If buying interest picks up, early constraints may occur at the falling red Tenkan-sen line at 0.9100 and the floor of the cloud at 0.9120. Next, the 50-period SMA, coupled with the flat blue Kijun-sen line at 0.9144, could hinder the push towards the 0.9175 high. Should buyers start to add momentum to the climb, a reinforced zone of highs from 0.9239 to 0.9286, which also includes the 100-period SMA, may prove difficult to overcome. Surpassing this key region, the 200-period SMA residing at the 0.9350 high may attempt to deny further gains towards the 0.9400 and 0.9467 peaks.
Overall, the short-to-medium-term timeframe remains bearish below the SMAs and the 0.9239 high. A break below the multi-year floor could repower the negative outlook.
