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  • USD/CHF remained confined in a range around 0.8800 mark through the mid-European session.
  • The set-up seems tilted in favour of bearish traders and supports prospects for further weakness.
  • Any meaningful recovery attempt beyond the 0.8860 region might be seen as a selling opportunity.

The USD/CHF pair seesawed between tepid gains/minor losses, around the 0.8800 mark through the mid-European session and consolidated its recent losses to multi-year lows.

The pair’s inability to register any meaningful recovery suggests that the recent bearish trend might still be far from being over. Meanwhile, technical indicators on the daily chart are holding deep in the bearish territory and add credence to the negative outlook.

The bearish bias is reinforced by the fact that the USD/CHF pair is trading well below its intraday moving averages – 50, 100 & 200-hour SMAs. Hence, a subsequent fall below the overnight swing lows, around the 0.8785 area, will set the stage for further weakness.

The next relevant target on the downside is pegged near 2014 swing lows, around the 0.8700 round-figure mark. The downward trajectory could further get extended and turn the USD/CHF pair vulnerable to test the next relevant support near the 0.8350-45 region.

On the flip side, any attempted recovery move is likely to confront resistance near the 0.8830 region. A sustained move beyond might trigger a short-covering bounce push the USD/CHF pair further beyond the 0.8860 supply zone, towards reclaiming the 0.8900 round-figure mark.

That said, the positive move might still be seen as an opportunity to initiate fresh bearish positions and runs the risk of fizzling out rather quickly amid the prevalent bearish sentiment surrounding the US dollar.

USD/CHF 1-hourly chart

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Technical levels to watch