As today’s USD/CHF chart shows, the exchange rate has fallen below 0.872 – the Swiss franc hasn’t been this strong against the US dollar since early February this year.
Bearish sentiment is driven by:
→ Expectations of a Fed rate cut, weakening the US dollar;
→ Low inflation in Switzerland – today’s CPI data shows -0.2%;
→ Geopolitical tension, particularly the escalation in the Middle East following the killing of Hamas leader Ismail Haniyeh and the anticipated response from Iran.
Market participants appear to view the franc as a “safe haven.”
Technical analysis of USD/CHF chart shows:
→ The price has been in a downtrend (shown in red) since May this year, with the downward movement accelerating in July, as indicated by the black lines.
→ The psychological level of 0.875, which served as support in February-March, was breached with a wide bearish candle on the first day of August.
→ Today, the price is near a support block formed by the lower boundaries of the mentioned channels.
Can the USD/CHF price bounce from the area where these channel boundaries intersect? Some recovery seems plausible given the current oversold condition indicated by the RSI.
However, if a rebound occurs, bulls may face a series of potential obstacles:
→ The former support level at 0.875;
→ The median boundary of the blue channel;
→ The upper black line.
Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
