USD/CHF traded higher during the European morning Tuesday, broke above the tentative downside resistance line taken from the high of May 7th, and poked its nose above the psychological barrier of 1.0000. What’s more, the pair has been printing higher highs and higher lows above a short-term upside line since June 7th, which combined with the aforementioned break suggests that some further near-term advances may be on the cards.
That said, in order to get more confident on that front, we would like to see a decisive break above 1.0010. Such a move could also drive the rate above the 200-EMA and could initially pave the way towards the 1.0050 zone, which is the low May 29th. That area acted as a decent support back on May 24th and 27th as well. The rate could pull back after challenging that zone but if the bulls are quick to retake control from above the psychological hurdle of 1.0000, we may see the upcoming recovery bypassing the 1.0050 zone and perhaps pushing towards the 1.0100 territory, a resistance defined by the highs of May 28th and 30th.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from slightly above 50, after testing its respective upside support line, while the MACD, although below its trigger line, lies within its positive territory and has just turned up. It could cross back above its trigger line soon. These indicators suggest that the rate has started picking up positive momentum again and support the case for some further near-term advances.
On the downside, we would like to see a clear dip back below 0.9960 before we start examining whether the bears have gained back the upper hand, at least in the short run. Such a dip could initially open the path towards the 0.9925 area, the break of which may allow extensions towards 0.9900, near the low of June 12th.
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