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Double top pattern around 0.9265 looms

  • USD / CHF continues to advance for the second day in a row, up 0.09%.
  • The risk appetite in the market weakens safe haven currencies, except for the USD, which is gaining against the CHF.
  • USD / CHF Price Forecast: A failure at 0.9268 would form a double top pattern opening the way for further losses.

The USD/CHF it spans two consecutive days of gains, trading at 0.9265 during the American session at the time of writing. In the overnight session, USD / CHF turned down to retest the 200 hourly Simple Moving Average (SMA) around 0.9235, then bounced amid positive market mood. Additionally, Glaxo’s treatment of an effective Omicron antibody surge mitigates market participants’ concerns as global stocks have rallied on Tuesday.

Other than that, the US dollar index, which tracks the dollar’s performance against a basket of rivals, is up 0.12%, settling at 96.45, a tailwind for USD / CHF, and for safe-haven currencies such as JPY and CHF weakening against the dollar.

The 10-year US Treasury yield follows in the footsteps of the DXY, rising nearly two bps to 1.45%.

USD / CHF Price Forecast: Technical Outlook

On the 1 hour chart, USD / CHF is retesting the November 30 high at 0.9266, as a result of a 100 pip bullish move that day. Furthermore, the Dec. 6 high at 0.9268 coincided with the aforementioned, making that price level a crucial line of defense for CHF bulls.

At press time, the pair is testing the aforementioned resistance, which if broken would expose the 0.9300 level. The breakdown of the latter would exert upward pressure on the pair. The next resistance would be support turned November 25 resistance at 0.9324, followed by November 26 high at 0.9360.

On the other hand, a failure at 0.9260 would form a double top pattern and could cause USD / CHF to fall. The first support would be the 200 hourly SMA at 0.92323. A break out of that level would expose crucial support areas such as the confluence of the 50 hourly SMA and the daily center pivot at 0.9229, followed by the 100 hourly SMA at 0.9214.

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