USD/CHF Price Analysis: Jumps after hitting a YTD low on RSI-Price action divergence
|- USD/CHF may be headed for an upward correction despite touching new lows.
- If buyers reclaim the 20-Day EMA at 0.8955, further upside is expected in the USD/CHF pair.
- USD/CHF at a brisk of falling towards 0.8800, once it falls beneath 0.8819.
The Swiss Franc (CHF) strengthened to a new high of the year against the US Dollar (USD), as the USD/CHF dropped towards 0.8819, the year-to-date (YTD) low, as risk aversion hit the markets. Nevertheless, the USD shrugged off its earlier losses, and the USD/CHF pair reversed its course, holding gains. At the time of writing, the USD/CHF is trading at 0.8858 and has gained 0.20%.
USD/CHF Price Action
Although the pair touched new lows, and the USD/CHF price action fell to a lower low, technically speaking, the USD/CHF might be headed for an upward correction. The Relative Strength Index (RSI) indicator is in bearish territory, though it has printed a series of successive higher troughs on each USD/CHF’s lower low. Therefore, a positive divergence is emerging, which could pave the way for further upside.
For that outcome to happen, USD/CHF buyers must reclaim the 20-day EMA at 0.8955. Once cleared, the pair must rally above the May 2 high, at around 0.9000. A decisive break of the figure would expose another resistance level at the 50-day EMA at 0.9067 before buyers can claim 0.9100.
Conversely, if USD/CHF collapses below 0.8819, a fall towards 0.8800 is on the cards.
USD/CHF Daily Chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.