Technical Analysis – USDCHF cheers on SNB rate cut
USDCHF rises rapidly after SNB lowers interest rates to 1.25%
Oversold signals favor the bulls; more upside needed for a positive outlook
USDCHF turned swiftly up to test its 200-day simple moving average (SMA) at 0.8890 after the Swiss National Bank (SNB) cut interest rates by a quarter percentage point for the second consecutive meeting despite some investors estimated no changes in borrowing costs.
The oversold signals coming from the RSI and the stochastic oscillator suggest that the rebound that took place today near the support line at 0.8840 has probably just started.
However, investors may preserve some caution until the 200-day SMA, which switched from support to resistance, gives the green light towards the 20-day SMA at 0.8970. The 23.6% Fibonacci retracement of the December-June upleg could be another hurdle near 0.9012 and the pair will have to claim it in order to reach the upper band of the short-term bearish channel at 0.9065. Even higher, the focus could shift to the descending trendline drawn from November 2022 at 0.9135.
Note that the gap between the 20- and 50-day SMAs continues to grow following the negative crossover between the lines. This questions the case of a bullish trend reversal.
Should the bears breach the channel’s floor at 0.8840, the sell-off could expand towards the 50% Fibonacci mark of 0.8770. Running lower, the price could stabilize near 0.8730 before meeting the 61.8% Fibonacci of 0.8670.
In a nutshell, USDCHF has the potential to start a bullish course in the coming sessions, though the outlook may not switch to bullish until the price breaks successfully above 0.9135.Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
