The Swiss Franc (CHF) ranks second best-performing major currency against the Dollar on a one-month rolling basis, second to GBP. The recent upward movement in USD/CHF over the past four weeks indicates potential exhaustion. Besides, it suggests a continuation of the medium-term downtrend. The key resistance zone at 0.8800/8830 becomes the focal point for USD to CHF analysis.
In the past four weeks, CHF currency has demonstrated its strength as the second-best performing major currency against USD. As of August 22, 2023, it has depreciated by just -1.40%, following GBP’s lead with -0.67% depreciation, according to a one-month rolling calculation.
Analyzing the technical aspects, the recent rally of +269 pips in the CHF exchange rate, witnessed from July 27, 2023, low of 0.8553 to August 21, 2023, high of 0.8828, appears to be a corrective rebound within a still-intact medium-term downtrend since March 8, 2023. This conclusion stems from multiple signals indicating bullish exhaustion.
Recent price action for USD to CHF saw a bearish response at the upper boundary of the medium-term descending channel, coinciding with the 50-day moving average. This combined resistance at 0.8830 and descending channel resistance reinforces a bearish tone.
From its August 21, 2023, high, 1 USD to CHF rate began forming a minor downtrend, marked by a series of lower highs and lower lows. A significant level to watch is the key short-term pivotal resistance at 0.8800. A breach below the near-term support of 0.8755, which is also the 20-day moving average, could lead to a decline towards 0.8700. Conversely, breaking above 0.8800 might negate the bearish sentiment and target the 0.8830 medium-term resistance.
Recent sessions show USD/CHF bouncing downwards after testing 0.8825, hinting at a bearish correction. If the bearish scenario prevails, the first target could be the 0.8720 level, but failure to break 0.8825 could lead to renewed gains.
USD to CHF remains in a consolidation range of around 0.8795. If the quotes exit the range upwards, it could indicate further momentum to 0.8844, extending the trend to 0.8888.
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