- USD/CHF is in a short-term downtrend falling towards a key low.
- The pair is oversold according to the RSI and at risk of a correction.
USD/CHF is trading lower in line with the dominant short-term downtrend after the pair established a sequence of descending peaks and troughs from the August 15 high.
Since “the trend is your friend”, the downtrend should continue, with the next key target at 0.8433, the key low of August 5.
USD/CHF 4-hour chart
The Relative Strength Index (RSI) momentum indicator is in the oversold zone, indicating a risk of correction. A buy signal for countertrend reactions is given when the RSI breaks out of oversold territory and closes back within the neutral territory (above 30).
A decisive break below the August 5 lows would see the downtrend extend further towards the next target at 0.8334.
A decisive breakout would be one accompanied by a long red candle that breaks well below the low and closes near its low or three red candles in a row breaking below the level.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
