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The USD/CHF pair is still capped below 0.8918/20, however, a break above here would complete a small “head and shoulders” base to trigger a correction to the core bear trend, with the 55-day average then seen at 0.8964, analysts at Credit Suisse apprise.

Key quotes

“USD/CHF remains below 0.8918/20 for now, however, the risk of a base and a deeper setback is growing and we have shifted our base case towards a deeper corrective setback before the core bear trend eventually resumes.” 

“A break above the December highs at 0.8918/20 would see a small intraday ‘head and shoulders’ base completed to open up further upside, with the next level at the 55-day average at 0.8964/69, then 0.9027/28. It’s worth highlighting that the ‘measured base objective’ is at 0.9083.”

“Longer-term, we look for the core bear trend to take over again post a deeper setback or otherwise, in line with the very large top from 2020 that remains in place. Therefore, we see support initially at 0.8856/40, then 0.8723/21, below which would lessen the basing risk and open up the recent low at 0.8758.”