USDCHF has been underperforming today, returning below the key 22-month high of 0.9535 that was reached on Tuesday. When looking at the bigger picture, the pair has been developing within an uptrend since June 2020.
The RSI’s momentum is too weak to provide a sustained move higher as it is showing some overbought signs. However, the MACD is stretching its positive move above its trigger and zero lines.
If price action remains above 0.9460 (immediate support), there is scope to test the latest high of 0.9535. Clearing this key level would see additional gains towards April’s 2020 inside swing low at 0.9585. Rising above it would see prices re-test the 0.9760 resistance, taken from the peak on May 2020.
If the 0.9460 support fails, then the focus would shift to the downside towards the 23.6% Fibonacci retracement level of the upward move from 0.8930 at 0.9535 at 0.9390, which if breached, would meet the 0.9380 support. From here, USDCHF would be on path towards the 20- and 40-day simple moving averages (SMAs) at 0.9340 and 0.9315 respectively, ahead of the 38.2% Fibonacci at 0.9300.
Overall, USDCHF has been positive but near-term weakness is expected to remain as long as the market is looking overstretched.
