- The pair is pushing lower as the US dollar suffers due to investors’ increased appetite for risk.
- According to investing.com, most investors hold long USD/CHF positions.
- In the charts, the RSI shows weakness in the bearish trend.
The USD/CHF forecast may turn positive, although it continued its decline on Monday as investors preferred riskier assets over the safe-haven dollar. This risk sentiment has been boosted by the hope that inflation in the United States will soon peak. There is hope in the energy sector, where oil is becoming cheaper daily. High fuel costs, which have played a big part in rising global inflation, might come down.
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Earlier in the day, investing.com released its currency pair indices, with USD/CHF coming in at 53.8%, up from last week’s 48.6%. This index shows that the percentage of traders holding long positions in the pair has increased and is currently slightly higher than those holding short positions.
USD/CHF key events today
Investors do not expect significant news releases from Switzerland, so all attention will be on the United States. The change in the total value of new orders for durable manufactured goods, measured by the core durable goods orders report, is expected to drop. This data gives a good idea of the current ordering trends, and a drop would indicate reduced manufacturing activity.
Investors are also waiting for a housing market report from the National Association of Realtors, which will release the pending home sales report. This report gives the change in homes under contract to be sold but still awaiting the closing transaction. Investors expect a drop in this value.
USD/CHF technical forecast: Bears might fail to break below 0.9500
Looking at the 4-hour chart, we see the price pushing lower. It is trading below the 30-SMA, showing bears are in control. The RSI is trading below 50, also favoring bearish momentum. However, RSI shows weakness in bearish momentum, as seen in the bullish divergence.
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This divergence shows that bears are losing steam, and bulls might be ready to take over soon. The price is trading close to 0.9500, a solid psychological level, and it might hold as support. The trend will only reverse if we see the price breaking above the SMA and the RSI trading above 50.
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Saqib Iqbal
