USD/CHF has been in a recovery mode since yesterday, when it hit support near the 0.9870 zone, which is slightly above the lower bound of a possible upside channel that’s been in place since October 20th. Today, the rate emerged above the 0.9910 zone, a move that in our view, suggests that some more recovery within the channel may be in the works.
We believe that the move above 0.9910 may have opened the way towards the 0.9930 territory, marked by the inside swing low of November 11th. If the bulls are not willing to stop there and push higher, then we may see larger advances, perhaps towards the high of November 12th, at around 0.9964.
Shifting attention to our short-term oscillators, we see that the RSI emerged above 50 and still points up, while the MACD, although negative, lies above its trigger line and appears ready to obtain a positive sign soon. Both indicators suggest that the rate may have started to pick up upside speed, supporting the notion for further short-term advances.
On the downside, we would like to see a dip below 0.9840, marked by the low of October 20th, before we start assessing whether the bears have taken the driver’s seat. The rate would be already below the lower end of the pre-discussed channel and the bears may initially aim for the 0.9820 barrier, which is marked by an inside swing low formed on September 5th. Another break, below 0.9820, could extend the decline towards the low of September 4th, at around 0.9796.
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