USDCHF Retests 3-Month Trough; Neutral in Near Term

Technical analysis of Forex market

USDCHF faced a sharp selling interest over the last few hours, flirting with the 0.9590 support level. This move is suggesting more losses, confirmed by the RSI, which is heading south below the 50 leveld. Moreover, the red Tenkan-sen line fell beneath the blue Kijun-sen line and the price is holding well below the 20- and 40-period simple moving averages (SMAs). Yet, the stochastic is hovering in the oversold, signaling that any weakness could be short-lived.

Stronger downside pressures could retest the 0.9590 support before moving towards the 0.9500 handle, taken from the low on March 30. Below that, the 0.9390 could come into view, identified by the low on March 16.

In the alternative scenario, immediate resistance could be provided by the 20-period SMA at 0.9610 and the 40-period SMA at 0.9633. Near these lines, the Ichimoku indicator lies and it could act as strong resistance as well. Above that, the 0.9650 barrier could attract attention ahead of the 0.9720 and 0.9735 marks.

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In brief, USDCHF maintains a neutral short-term outlook after the drop below the 0.9650 level on May 28, while in the medium-term, the picture remains negative.