Short-term bias seems tilted to the upside

• USD / CHF was lower on Tuesday and moved further away from the 0.8915-20 supply zone.
• Positive technical indicators favor gains and support prospects for further gains.
• A sustained move past the trend channel resistance is needed to confirm the positive bias.

USD / CHF pulled back on Tuesday and eroded a portion of the positive move the day before to the 0.8915-20 supply zone, or month-long highs. The aforementioned region coincides with the upper bound of a one-week rising channel and should now act as a key point for short-term traders.

However, the subsequent decline remained limited and the USD / CHF pair has so far managed to stay above the confluence support of the 50 hourly simple moving average and the trend channel, around the 0.8885 / 80 region. . A convincing break below will suggest that the corrective bounce has been exhausted and would make the pair vulnerable.

Meanwhile, the technical indicators on the hourly and day charts have been struggling to gain significant traction, but remain in positive territory. This makes it prudent to wait for sustained weakness below trend channel support before traders begin positioning for the resumption of the previous downtrend.

USD / CHF could then accelerate the decline towards the intermediate support of 0.8815 / 10. Some subsequent selling below the 0.8800 mark will set the stage for a pullback to challenge the multi-year lows around the 0.8760 / 55 region.

On the other hand, the 0.8915 / 20 region could continue to act as a strong immediate resistance, which if left behind decisively will be seen as a new trigger for the bulls. This, in turn, should pave the way for further rallies and has the potential to push USD / CHF even further back to the 0.9000 key psychological zone.

USD / CHF one hour chart