With the US Dollar Index trending lower combined with generalised political tensions worldwide, USDCHF appears to be selling on rallies and attracting much of the risk-off flow.
October has seen a steady decline for the pair and produced a downward bearish channel, as shown above. It would seem the 92.00 region is beyond buyers at this stage as price action is unable to sustain any viable attempts above these levels.
The top of this bearish channel links up with the 200 MA (yellow line), acting as strong resistance in the short-term. We also notice some price divergence concerning the RSI indicator that suggests a further sell-off may emerge in the coming days.
To the upside, bulls will be seeking confirmation of some consecutive candle closes above the 200 MA line as a litmus test for a change in overall sentiment. Upside targets include 91.97 and 92.96. Alternatively, if the strength of the current resistance levels continues, we may well see USDCHF sink below 90.00 levels in both the short and longer-term time frames.
Note: Click on charts to enlarge.
By Adam Taylor CTEe
Sources: Go Markets, Meta Trader 5, TradingView, Bloomberg
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