- 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
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