USD/CHF set for a painful weekly close; enters oversold zone.

USD/CHF is set to close deep in the red sea this week following the sharp pullback off the 0.9625 level.

The bears are currently ready to pierce the 0.9400 number and open the way towards the 0.9320 support, but some caution should be warranted as the RSI is entering the oversold area, suggesting that negative momentum could soon lose strength. In case the downfall stretches below 0.9320, all attention would shift to 0.9258, where the pair failed to close lower in early March, while beneath that, the 5-year low of 0.9191 would come next to the radar.

On the other hand, the price needs to cross above 0.9456, which is the 61.8% Fibonacci retracement of the March rebound, to pick up steam towards the 50% Fibonacci of 0.9540. Higher, the market would resume its neutral profile in the short-term picture, pushing resistance up to the 38.2% Fibonacci of 0.9625 and the 20-day simple moving average (SMA). However, what buyers are eagerly waiting for is a sustainable rally above the descending trendline stretched from the 1.0234 level. Before that, the 23.6% Fibonacci of 0.9730 and the 200-day SMA currently at 0.9760 should give way first.

Meanwhile, medium-term traders would prefer a decisive close above 0.9900 to upgrade their outlook to a positive one.

In brief, USD/CHF could face a stronger bearish bias below 0.9400. In the medium-term, the outlook remains neutral within the 0.9191 and 0.9900 borders.

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This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Source: XM