Bearish-engulfing candles sparked a fall towards 0.9420s

  • November 23, 2022
  • A softer US Dollar is weighing on the USD/CHF, down by almost 1%.
  • A bearish-engulfing candle pattern exacerbated a fall of 200 pips in the USD/CHF.
  • Short term, the USD/CHF is downward biased and might test 0.9300.

The USD/CHF dives sharply, extending its losses to two straight days, after reaching a new two-week high of 0..9600, nearby the 200-day Exponential Moving Average (EMA) at 0.9628. Failure to reclaim the former exacerbated a 200-pip fall. Therefore, the USD/CHF is trading at 0.9430, losing almost 1%.

USD/CHF Price Analysis: Technical outlook

The USD/CHF daily chart portrays the formation of a bearish-engulfing candle chart pattern formed with Monday and Tuesday’s USD/CHF price action. On Wednesday, the major continued its downward path, after printing a daily high of 0.9533, right at the 23.6 % Fibonacci retracement, defended by sellers, as shown by the USD/CHF plunging 100 pips. Even though the Relative Strength Index (RSI) followed suit, it turned flat in bearish territory, opening the door for consolidation.

In the short term, the USD/CHF collided with the 50-period Exponential Moving Average (EMA) around 0.9488, and a downslope trendline was drawn since the beginning of November. Hence, the US Dollar (USD) buyers unable to break above 0.9500 exposed the pair to selling pressure.

Therefore, the USD/CHF first support will be the 0.9400 figure, followed by the November 15 swing low at 0.9356. A decisive break will expose the 0.9300 figure. Upwards, the USD/CHF key resistance level lie at 0.9500, which, once cleared, could open the door towards 0.9600 and beyond.

USD/CHF Key Technical Levels