USDCHF has rebounded from near two-year lows of 0.9438 set in July to a 7-week high of 0.9772 this week, climbing back into the Ichimoku cloud. However, it’s ascent into the cloud was cut short after the pair found resistance at the 100-day exponential moving average. It has since dropped back below the cloud, with the bottom of the cloud currently providing resistance around the 0.9655 area. The RSI has fallen to around the 50 mark, pointing to a neutral bias in the near term.
Should prices continue declining, the kijun-sen line will likely act as the next support at just above the 0.96 handle. Below that, the psychological 0.95 level could prove another barrier before the pair challenges the July 21 low of 0.9438. A breach of this low would signal a resumption of the longer-term downtrend that began in January.
In the event of a fresh push into the Ichimoku cloud, the previous resistance level of 0.9690 could stand in the way of the 100-day exponential moving average, which is currently at 0.9750. A break above this level would open the way towards the top of the cloud at 0.9825. However, without a sustained rally that would take prices to the 200-day moving average at around 0.9930, the medium-term outlook will remain bearish.
