USDCHF stepped above the 0.8890 restricted zone on Wednesday, fueling hopes that the recovery could pick up momentum during the next sessions.
The technical indicators are endorsing the bullish scenario as the RSI and the MACD are clearly trending higher and above their neutral marks. The stochastic oscillator is sloping upwards too, though it has already crossed above its 80 overbought level, feeding speculation that additional gains could soon take halt.
The 0.8980-0.8995 region, which encapsulates the 50% Fibonacci level of the 0.9437-0.8551 downtrend, could be the next challenge. Then, a successful move above the 200-day simple moving average (SMA) at 0.9060 would be the first in almost a year, and hence might be of psychological importance. Still, only a decisive close above the 61.8% Fibonacci mark of 0.9100, which cooled down upside pressure in June and April, would indicate a bullish trend reversal in the short-term picture.
In the event the bulls show signs of fatigue quickly, with the price sliding back below the 38.2% Fibonacci of 0.8890. the focus will turn to the 20-day SMA and the broken resistance trendline near 0.8800. Should the price dive below the 50-day SMA and the 23.6% Fibonacci of 0.8760 too, the sell-off could extend to 0.8700. A steeper decline could test the 0.8600 number.
Summing up, USDCHF is expected to welcome more buying in the short-term, shifting the spotlight to the key bar of 0.8995.
