USDCHF sank to its lowest level since January 2015 when the Swiss National Bank shocked markets by scrapping its three-year-old cap on the Swiss franc.
The pair is currently consolidating its 4.0% weekly freefall near the lower boundary of the broad bearish channel slightly below 0.8600. This is where the price drifted higher in January 2015. Therefore, with the RSI and the Stochastics having dived significantly within the oversold zone, an upside reversal could be possible in the coming sessions. Also, the Bollinger bands are far apart from each other, suggesting that the latest bearish wave could soon take a breather.
If the downtrend worsens below the channel, immediate support could commence near the 2015 and 2011 constraining zone of 0.8530. A step lower from there could initiate a new aggressive decline likely towards the 0.8360 handle, while falling even deeper, the price may retest the 0.8275-0.8200 territory, where the pair paused its downtrend in 2015 and faced limitations in 2011.
Alternatively, a bounce up could fizzle out somewhere between the 0.8700 psychological mark and the 2021 low of 0.8755. Should buyers cross above the previous support area of 0.8855, the price may revisit the 0.8930-0.8980 congested territory.
Summing up, USDCHF seems to be testing a make-or-break point around a new eight-year low of 0.8600 following a weekly aggressive sell-off. If the price fails to pivot, the spotlight will fall on 0.8530.
