USD/CHF Price Analysis: Challenges ascending channel resistance, around 0.8915-20 region

• USD/CHF gained strong positive traction on Monday and recovered further from multi-year lows.
• Bulls might now wait for a sustained move beyond a strong resistance near the 0.8915-20 region.

The USD/CHF pair gained some strong positive traction on the first day of a new trading week and built on last week’s bounce from multi-year lows. The momentum extended through the mid-European session and pushed the pair beyond the 0.8900 mark, to two-week tops in the last hour.

The pair has now moved closer to 0.8915-20 supply zone, which coincides with the top boundary of an upward sloping channel. A convincing breakthrough will be seen as a fresh trigger for bullish traders and pave the way for a further near-term appreciating move amid a broad-based USD strength.

Meanwhile, technical indicators on the daily chart have just started moving into the bullish territory and add credence to the constructive outlook. That said, oscillators on hourly charts are on the verge of moving into the overbought territory and warrant some caution for bullish traders.

Hence, it will be prudent to wait for some strong follow-through buying beyond the 0.8915-20 strong barrier before placing fresh bullish bets. The subsequent positive move has the potential to push the USD/CHF pair further towards reclaiming the key 0.9000 psychological mark.

On the flip side, any meaningful dip now seems to find decent support near the 0.8875 level. Any subsequent fall is likely to find decent support near the trend-channel support, around mid-0.8800s. The latter also marks 50-hour SMA and should act as a pivotal point for short-term traders.

USD/CHF 1-hourly chart

Technical levels to watch