The USD/CHF pair edged higher to near 0.8225 during the early European session on Wednesday, bolstered by a resurgence in demand for the US Dollar (USD). Investor optimism surrounding a potential US-China trade deal also lent support, alongside US President Donald Trump backing away from previous threats to fire Federal Reserve (Fed) Chair Jerome Powell, which helped stabilize the Greenback.
Despite this uptick, the broader bearish sentiment for USD/CHF remains intact, as the pair trades below the crucial 100-day Exponential Moving Average (EMA), signaling continued downside pressure. The 14-day Relative Strength Index (RSI) further reinforces this view, standing below the neutral 50-mark at 36.0, suggesting that sellers retain control in the near term.
The initial support for the pair is seen at 0.8121, the low recorded on April 16. Should the price dip further, the next level to watch is 0.8040, the low of April 21. The psychological barrier at 0.8000 will be a key level for traders to monitor in case of extended weakness.
On the upside, the first resistance level stands at 0.8360, the low from April 9. A sustained break above this level could open the door to further gains, potentially targeting 0.8609, the high from April 8. A decisive breakout above this resistance zone could pave the way for a rally toward 0.8750, which coincides with the 100-day EMA.
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