USD/CHF Price Analysis: Double top in play but sellers’ failure at 0.9520 could spark a test of 0.9600

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  • USD/CHF bounces off daily lows and remains above the 50% Fibonacci retracement level on the H1 chart.
  • Disappointing US economic data triggers a counter-cyclical move with the US dollar rising rather than falling.
  • The USD/CHF daily chart formed a double top that is in play, but the failure of USD/CHF sellers to break above 0.9520 could open the door for a rally towards 0.9600.

The USD/CHF is attempting to recover after six consecutive days of declines, although it has failed to break below the daily low of June 24 around 0.9561 and remains stuck within that day’s price action amid lack of further momentum above/below the range 0.9520-0.9630. At 0.9563, USD/CHF is up just 0.07% in the American session.

US stocks start to fall as market sentiment has turned sour. During the Asian session, positive news from China, which eased the lockdown for travellers, was overshadowed by a dismal reading on US consumer confidence, triggering a counter-cyclical move in the USD, and the dollar index. The US dollar advanced strongly near last Friday’s high of around 104.377, up 0.42%.

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USD/CHF traders should note that negative US data from a growth standpoint can sometimes boost the greenback, as is happening today.

USD/CHF daily chart

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A double top remains on the daily chart of USD/CHF. However, since last Friday, CHF buyers failed to make a fresh swing low below the 0.9520-0.9630 range, keeping the pair trapped. Meanwhile, the Relative Strength Index (RSI) at 39.72 is starting to show some signs of pointing slightly higher, but unless it breaks the 50 mid-line, the bias remains negative, and USD/CHF could probe the mean. 100 day moving (DMA) at 0.9508 in the short term.

USD/CHF 1 hour chart

USD/CHF is hovering around the daily pivot near 0.9573, with the 50, 100 and 200 Simple Moving Averages (SMAs) above the exchange rate. However, the pullback from the daily highs around 0.9586 could be short-lived as price jumped from near the 50% Fibonacci retracement at 0.9560 following the London deal.

If USD/CHF breaks above the 50 SMA at 0.9568, a retest of the daily highs is anticipated. That said, the next major resistance would be the daily pivot at 0.9573, followed by the 100 SMA confluence and daily high near 0.9586-88, followed by the R1 daily pivot at 0.9600.

Technical levels

USD/CHF

Panorama
Last Price Today 0.9561
Today’s Daily Change -0.0003
Today’s Daily Change % -0.03
Today’s Daily Opening 0.9564
Trends
20 Daily SMA 0.9717
50 Daily SMA 0.9733
100 Daily SMA 0.9509
200 Daily SMA 0.9363
levels
Previous Daily High 0.962
Previous Daily Minimum 0.9543
Previous Maximum Weekly 0.9713
Previous Weekly Minimum 0.9522
Monthly Prior Maximum 1.0064
Previous Monthly Minimum 0.9545
Daily Fibonacci 38.2% 0.9572
Daily Fibonacci 61.8% 0.9591
Daily Pivot Point S1 0.9531
Daily Pivot Point S2 0.9498
Daily Pivot Point S3 0.9454
Daily Pivot Point R1 0.9608
Daily Pivot Point R2 0.9653
Daily Pivot Point R3 0.9686

Source: Fx Street

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