USDCHF looks to be strongly bearish after a decent pullback from the November 11 high, causing the pair to retreat towards an almost six-year low of 0.8825.
The MACD currently reflects a stall in the negative momentum, in the negative area, suggesting a flattening mode, however, the RSI is weakening further in the bearish territory. That said, a bearish picture is currently displayed within the Ichimoku lines and all the SMAs.
If sellers manage to close decisively below the six-year low of 0.8825, the price could move towards the February 2014 low of 0.8680. Breaching this trough, the next support could come from 0.8210, taken from the low on January 2015.
To the upside, an initial important resistance region could come from the 20- and 40-period simple moving average (SMA) at 0.8856 and 0.8870 respectively. Conquering this, the 0.8890-0.8910 resistance region could attract attention ahead of the 23.6% Fibonacci retracement level of the down leg from 0.9191 to 0.8825 at 0.8910. Above this, the 0.8945 barrier could be the next target.
To sum up, USDCHF has been in an aggressive bearish structure over the last month and only an advance above the 61.8% Fibonacci of 0.9051 may change this outlook.
