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USD/CHF takes offers to reverse previous day’s bounce off 8.5-month low.
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Markets stabilized after global central banks portrayed a volatile day, allowing sellers to hide.
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Failure to cross support-turned-resistance directs bears towards three-week-old trend line support.
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Preliminary PMIs for December, risk catalysts will be important for fresh impulse.
USD/CHF stays pressured around the intraday low near 0.9270 as it reverses the previous day’s rebound from a multi-day bottom during Friday’s sluggish Asian session.
The Swiss Franc (CHF) pair’s previous recovery could be linked to the market’s rush for the US Dollar in search for safety as major central banks, including the Swiss National Bank (SNB), announced rate hikes. Not only that, the policymakers’ readiness to keep the rate higher for longer also favored the US Dollar’s safe-haven demand.
Additionally, US President Joe Biden’s crackdown on Chinese IT companies added strength to risk-off sentiment and drove the USD/CHF price.
That said, the lack of major data/events early in the Asian session added to the market consolidation after a big day to resume the downside for the USD/CHF pair. Additionally, favoring pair sellers is the technical pattern that could term Thursday’s recovery as a corrective bounce that failed to clear important resistance.
Going forward, the first reading of activity numbers for the month of December will be important for clear guidance for USD/CHF pair traders.
Technical analysis
A clear downside break of the monthly support line, followed by failure to cross the same during a corrective bounce, keeps the USD/CHF bears hopeful amid steady RSI (14) conditions.
That said, a downward-sloping support line from November 24, close to 0.9225, could restrict the short-term downside of the Swiss Franc (CHF) pair. Following that, a late March low near 0.9195 will be in focus.
Alternatively, recovery moves need to cross the support-turned-resistance, around 0.9300 by the press time, to retake control. Even so, the 50-SMA and the 100-SMA can challenge the buyers around 0.9345 and 0.9390 in that order.
USD/CHF: Four-hour chart
Trend: Limited downside expected
ADDITIONAL IMPORTANT LEVELS
