• USDCHF’s retreat continues with a new 6-month low recorded

• Downtrend from early May high is in place

• Momentum indicators acknowledge the bearish pressure

USDCHF is trading sideways today, a tad above the 0.8699 level and trying to record its fourth consecutive red candle since failing to break above the 200-day simple moving average (SMA). It has been a one-way move since the May 1 local peak with USDCHF actually registering a new 6-month low amidst a series of lower lows and lower highs.

Momentum indicators are mostly confirming the current bearish pressure. More specifically, the Average Directional Movement Index (ADX) is edging higher and tentatively signaling the presence of a muted bearish trend in USDCHF. Additionally, the RSI is moving lower again, far from its 50-midpoint and close to the December 2023 lows. More importantly, the stochastic oscillator has returned inside its oversold territory. There are some early signs of a bullish divergence forming but the current bearish move has to be completed first. 

Should the bears remain hungry, they could try to break below the March 13, 2014 low and then have a go at pushing USDCHF even lower. The 0.8552-0.8593 range, which is defined by the October 27, 2011 low, the July 27, 2023 low and the 23.6% Fibonacci retracement of the October 21, 2022 – July 27, 2023 downtrend, stands in bears' way to test the 2024 lows.

On the flip side, the bulls will probably try to defend the 0.8699 level and then gradually set course for the 0.8754-0.8757 area that is populated by the January 6, 2021 low and the 38.2% Fibonacci retracement. Even higher, they could test the resistance set by the busy 0.8872-0.8885 region, assuming they successfully surpass the May 4, 2023 low at 0.8819.

To sum up, the ongoing bearish pressure has pushed USDCHF to a new multi-month low with the bulls desperately trying to stage a comeback.