USDCHF pared some of its gains as the US dollar lost momentum. Having made an intraday high of 0.80732, it is currently trading at 0.80540.
The shaky US-Iran ceasefire quickly broke apart after more US military operations sparked retaliatory strikes targeting Bahrain and Kuwait, with Tehran accusing Washington of breaking the deal amid rising conflict reported on July 7–8. A significant flashpoint once again, the Strait of Hormuz creates questions about possible upsets to regional stability, oil supplies, and world trade. While experts caution that more strikes or maritime events might set off broader spillover effects, markets have reacted by pricing in greater geopolitical risk premiums, especially in crude oil, Gulf shipping, defense stocks, and safe-haven assets. Ongoing strikes, any mediation attempts to get negotiations going again, and incidents in the strait are important events to keep an eye on since a de-escalation signal may swiftly help to reduce tensions, while more attacks would probably keep the market volatility high.
Technical Analysis Points to Further Bearishness
The pair is trading below the 55-EMA, above the 200-EMA, and 365-EMA on the 4-hour chart, indicating a mixed trend. The immediate resistance is at 0.8090; any break above targets 0.8150/0.8200.
Support Levels and Potential Declines
On the downside, near-term support is around 0.8040; any violation below will drag the pair to 0.8000/0.7965/ 0.7925/0.7865/0.7800/0.7765/0.7000/0.7660/0.7628.
Indicators (4-hour chart)
CCI (50) - Bearish
Directional Movement Index - neutral
Trading Strategy Recommendation
It is good to sell on rallies around 0.8068-70 with SL around 0.8150 for a TP of 0.7960.
