USD/CHF continued trading south on Friday, to hit support fractionally above the 0.9650 barrier, defined by the low of the 18th of April. After falling below the lower end the sideways range that contained most of the price action from the 14th of June until the 21st of August, the pair has been trading in a short-term downtrend, marked by the tentative trendline taken from the peak of the 20th of the month. So, as long as the rate continues to trade below that line, we would consider the short-term picture to be negative.
We would expect the bears to stay in charge and try to push the battle below 0.9650. If they manage to do so, then we may see them driving the rate towards the 0.9580 zone, defined by the lows of the 16th and 17th of April.
Our short-term oscillators detect strong downside speed and support the notion for further declines. The RSI lies well within its below-30 territory and keeps pointing down, while the MACD stands below both its zero and trigger lines, and points south has well.
Now, in case the bears decide to take a short-term break, then we may see a recovery towards the 0.9715 resistance. However, the pair would still be trading below the aforementioned downtrend line and thus, we would still see a decent chance for another leg down. We would like to see a clear move above that line and the 0.9715 level before we start examining the scope of larger advances. Such a break could initially aim for the 0.9745 zone, the break of which could open the way for a test near our next resistance, at 0.9780.