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  • USD/CHF’s recovery from 3.5-week lows could be extended further. 
  • Gains will likely be short-lived, as the daily chart is signaling strong bearish sentiment. 

USD/CHF is currently trading at 0.9693, representing a 0.15% gain on the day, having hit a low of 0.9674 in early Asia. That level was last seen on Feb. 4.

The recovery from 3.5-week lows has confirmed bullish divergence of the relative strength index on the hourly chart. The bullish divergence indicates seller exhaustion and could power further gains in the pair. 

Gains, however, will likely be short-lived, as Thursday’s big red marubozu candle indicates the bearish sentiment is quite strong. The 14-day RSI is also reporting bearish conditions with a below-50 print. 

A violation at the session low of 0.9674 would expose support at 0.9629 (Feb. 3 low). on the higher side, a close above 0.9771 (Thursday’s high) is needed to invalidate the bearish outlook on the daily chart. 

Daily chart

Trend: Bearish

Technical levels