USDCHF: Our broader outlook on USDCHF remains lower. The pair is now seen challenging the 0.8897 level, its 2011 low where a decisive break will resume its long term downtrend.
This will set the stage for more weakness towards its psycho level at the 0.8800 level with scope for further price extension towards the 0.8700 level, all representing its psycho levels. Its daily RSI is bearish and pointing lower supporting this view.
Alternatively, a break and hold above the 0.9340 level will have to occur to reverse its present bear pressure and then open up further upside risk towards the 0.9368 level, its Mar 09’2011 high. We expect that level to cap gains and turn the pair lower if tested but if that fails, further strength could develop towards the 0.9503 level. All in all, the pair remains vulnerable to the downside and looks to resume its long term downtrend.
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