The pair showed a minor sell-off on safe-haven demand. Overall bias remains bullish as long as support 0.8780 holds. It hit a high of 0.89180 yesterday and is currently trading around 0.88586.
The Swiss Franc (CHF) gained strength yesterday mainly due to rising geopolitical tensions, especially related to the Ukraine conflict and the Middle East. Increased fears over missile and drone attacks in Ukraine led investors to seek stability in safe-haven currencies like the CHF. The USD/CHF pair saw changes as the U.S. Dollar weakened, influenced by signals from the Federal Reserve about potential interest rate cuts. Switzerland's strong economy and reputation for neutrality also make the CHF more appealing during uncertain times. As geopolitical tensions continue, the CHF is likely to remain strong against riskier currencies.
Technical Analysis
The pair is currently trading below the 34- and above 55-EMA on the 4-hour chart.
Near-Term Resistance: Current resistance is at 0.8860. A break above this level could lead to targets at 0.88825/0.8920/0.8950/0.9000. The break above 0.87500 confirms that decline from 0.9225 got completed at 0.83750.
Immediate Support: The next support level is at 0.8780. If this level is broken, the pair could drop to 0.8720/0.8700/0.8660/0.8600/0.8580, 0.8550, 0.8525, 0.8499, 0.8440, 0.8420, 0.8390, 0.8365 (61.8% Fibonacci projection), or even 0.8340.
Indicator Analysis (4-hour chart)
- CCI (50): Bullish
- Average Directional Movement Index: Neutral
Overall, the trend remains neutral
Trading Recommendation
Consider buying on dips around 0.8800, with a stop loss set at 0.8760 and aiming for a target price of 0.8925/0.8950.
