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  • USD/CHF edged lower on Tuesday and retreated further from the 0.8915-20 supply zone.
  • Positive technical indicators favour bullish traders and support prospects for further gains.
  • A sustained move beyond trend-channel resistance is needed to confirm the positive bias.

The USD/CHF pair witnessed some selling on Tuesday and eroded a part of the previous day’s positive move to the 0.8915-20 supply zone, or one-month tops. The mentioned region coincided with the top boundary of a one-week-old ascending channel and should now act as a key pivotal point for short-term traders.

The subsequent slide, however, remained limited and the USD/CHF pair, so far, has managed to hold its neck above the 50-hour SMA/trend-channel confluence support, around the 0.8885-80 region. A convincing break below will suggest that the corrective bounce has run out of the steam and turn the pair vulnerable.

Meanwhile, technical indicators on hourly/daily charts have been struggling to gain any meaningful traction but are holding in the positive territory. This makes it prudent to wait for sustained weakness below the trend-channel support before traders start positioning for the resumption of the prior downtrend.

The USD/CHF pair might then accelerate the downfall towards the 0.8815-10 intermediate support. Some follow-through selling below the 0.8800 mark will set the stage for a slide back towards challenging multi-year lows, around the 0.8760-55 region.

On the flip side, the 0.8915-20 region might continue to act as an immediate strong resistance, which if cleared decisively will be seen as a fresh trigger for bulls. This, in turn, should pave the way for additional gains and has the potential to push the USD/CHF pair further towards reclaiming the key 0.9000 psychological mark.

USD/CHF 1-hourly chart

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Technical levels to watch