- USD/CHF’s daily RSI has diverged in favor of the bulls.
- A bullish reversal needs a break above the January 10 high.
USD/CHF’s sell-off seems to have run out of steam, technical charts indicate.
The pair jumped 0.30% on Friday, confirming a bullish divergence of the 14-day relative strength index. A bullish divergence occurs when an indicator charts higher lows, contradicting lower lows on price and is considered an indication of ebbing bearish momentum.
Further, Friday’s gain validated the seller exhaustion signaled by the preceding day’s long-tailed candle.
A bullish reversal, however, would be confirmed, if and when the pair manages to rise above the January 10 high of 0.9762.
The case for a rise to 0.9762 would strengthen once the pair violates the 10-day moving average hurdle at 0.9691. At press time, USD/CHF is trading at 0.9678.
A failure to hold above the hourly chart support at 0.9642 would shift risk in favor of a drop to 0.9613.
Daily chart
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Trend: Bearish
Technical levels
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