USD/CHF Stays Range-Bound

USD/CHF traded higher yesterday, but hit resistance fractionally below the 0.9765 level and then, it retreated. Today, the pair was found virtually unchanged. Overall, the rate has been trading within a sideways range, between 0.9590 and 0.9800, since March 30th, and thus, we would consider the near-term outlook to be neutral for now.

In order to start examining the bullish case, we would like to see a decisive break above the range’s upper bound, at 0.9800. Such a move may initially pave the way towards the high of March 24th, at around 0.9845, the break of which may allow extensions towards the 0.9900 zone, defined as a resistance by the highs of March 20th and 23rd. The bulls may decide to take a break after hitting that zone, thereby allowing the rate to retreat somewhat. However, as long as such a setback stays limited above the upper end of the range, we would see decent chances for the bulls to return stronger and perhaps drive the battle above the 0.9900 area. The next zone to consider as a resistance may be the inside swing low of November 25th, at 0.9960.

Shifting attention to our short-term oscillators, we see that the RSI has been oscillating around its 50 line recently, while the MACD lies near both its zero and trigger lines, pointing east. Both indicators detect a lack of directional momentum, enhancing our choice to stay sidelined for now.

On the downside, we would prefer to wait for a dip below the range’s lower side, at 0.9590 before we begin assessing whether the bears have gained the upper hand. The break may open the path towards the psychological zone of 0.9500, which provided strong support on March 27th and 30th. If the bears do not stop there either, then we may see them putting the 0.9420 territory on their radars. That zone acted as a support on March 13th.