USDCHF has been outperforming in the past couple of sessions, breaking back above the short-term simple moving averages (SMAs) and the Ichimoku cloud. When looking at the bigger picture, the pair is still developing within a descending movement after its drop from the 0.9900 psychological level.
However, the momentum is too weak to provide a sustained move higher. The RSI is moving slightly sideways in the positive region, while the MACD is trying to surpass the trigger line, extending the positive movement.
If price action remains above the Ichimoku cloud, there is scope to test the immediate downtrend line around the 0.9000 round number. Clearing this key level would see additional gains towards the 0.9040 barrier. This is considered a strong resistance, which has been rejected a few times in the past. Rising above it would see prices testing the 200-day SMA at 0.9155, shifting the outlook to neutral.
If the price retreats lower, then the focus would shift to the downside towards the 0.8845 and the 0.8750 supports, which, if breached, would increase downside pressurend bring about a reversal of the trend. From here, USDCHF would be on the path towards the 0.8700 level, taken from the trough in March 2014.
Overall, USDCHF has been bearish since March 2020. In the case that the price surges above the diagonal line, it could switch the market to neutral, while a jump above the 200-day SMA, could open the door for a possible positive bias.
