USDCHF: Oversold RSI and Bullish Divergence

USDCHF continues to trade lower and lost another 150 pips yesterday on broad-based US dollar weakness and geopolitical tension. Fed's policy was the main reason for US dollar weakness. The central bank was dovish and the Dot plot shows that 8 FOMC members out of 18 expect rate cut this year. The escalation of tension in the Middle East after Iran downed down a US drone has increased demand for Safe-haven assets like yen, gold and Swiss franc. The pair hits a 6-month low of 0.97919 and is currently trading around 0.98271.

On the higher side, near term resistance is around 0.9845 and any violation above will take the pair to next level till 0.9900/0.9945. The decline from 1.02350 will come to end only if pair break above 1.01250.

The near term support is around 0.9790 and any convincing break below that level will drag the USDCHF till 0.9755/0.9716.

It is good to buy on dips around 0.9790-95 with SL around 0.9760 for the TP of 0.9845/0.9860.