USD/CHF Looks To Be Losing Upside Momentum; Is it Time For A Correction?

USD/CHF has been in a rally mode recently. On the 26th of April, the rate accelerated to the upside, breaking above the upper bound of the upside channel that’s been containing the price action since mid-February. However, this week, the bulls have started losing their appetite and the rate entered a sideways mode, between the round number of 1.0000 and the 1.0060 level.

Still, the rate continues to trade above the upper bound of the aforementioned channel, but we would like to see a clear break above 1.0060 before we start examining the case of a trend continuation. Such a break would confirm a forthcoming higher high and could initially pave the way towards our next resistance level of 1.0100, defined by the peak of the 11th of May 2017.

Taking a look at our short-term oscillators, we see that the RSI, although above 50, it turned down and looks to be heading towards that equilibrium line. It could fall below 50 soon. The MACD, even though within its positive territory, lies below its trigger line, pointing south as well. What’s more, there is negative pergence between both these indicators and the price action. These technical signs suggest that the prevailing uptrend may have started to lose some steam, and that a corrective setback may be in the works.

A clear dip back below the round figure of 1.000 could confirm the case of a retreat and could open the path towards the crossroads of the 0.9960 and the channel’s upper bound. That said, we would like to see a clear break below that zone before we abandon the bullish case, at least in the short run. Such a move would bring USD/CHF back within the channel, and could initially aim for the 0.9920 support obstacle.

USD/CHF

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