USD/CHF is breaking below the Daily Support Range – Is it a Reversal Confirmation?
USD/CHF Technical Analysis
USD/CHF has dropped below the 50-Day Exponential Moving Average line, hovering in the daily support range. Friday’s strong bearish close dragged the prices below the ascending trendline. There are more chances of a further price drop in the coming hours than a reversal. The bearish trend that started last week might continue in the short run.
Any break below the daily support range will trigger the next support level at 0.93047. It is the same level where 100-Day Simple Moving Average is resting. A breach below this level would add extra pressure towards the weekly support range.
However, if the daily support range manages to hold the currency pair USD/CHF, it would activate the initial at 0.93989. This level will try to hold the prices below the trendline. Any break above the trend line would resume the bullish trend for the second time.
Meanwhile, technical indicators like the Moving Average Convergence and Divergence (MACD) histogram have just dropped below the zero line. It indicates high selling pressure ahead. Furthermore, The Relative Strength Index (RSI) at 35 suggests that there might be some room for a further decline ahead before entering the oversold region. It also indicates further price drop ahead.
Overall, the idea is to wait for the price to break below critical support at 0.93047 before placing a short position. However, on the bullish side, any break above 50-EMA at 0.93618 could open an opportunity for a long position in the market.