USDCHF Downside Move Gains Traction to Mid 0.8800 As COVID-19 Surge Weighs On

USDCHF Downside Move Gains Traction to Mid 0.8800 As COVID-19 Surge Weighs On

USDCHF Price Analysis – January 19

The USDCHF pair retreated around 49 pips from daily highs and is presently placed near the lower range of the trading channel between 0.8920 and 0.8858 levels. The concerns about a surge in COVID-19 cases weighed on sentiment and benefitted the safe-haven CHF.

Key Levels
Resistance Levels: 0.9304, 0.9187, 0.8998
Support Levels: 0.8858, 0.8757, 0.8639
USDCHF Long term Trend: Bearish
The USDCHF met renewed selling at the beginning of the day at the 0.8916 level and declined steadily due to continued broad-based USD weakness on risk sentiment. The price tumbled to an intraday low at 0.8867 level before recovering.

Meanwhile, in the larger context, the decline from the 1.0231 level is seen as the third phase of the trend from 1.0342 (high). There is no clear sign of completion yet. It is followed by the 138.2% projection of 1.0342 to 0.9191 level from 1.0231 at 0.8639 level. In any case, a break of 0.9304 resistance level is required to signal medium term bottoming.
USDCHF Short-term Trend: Bearish
The intraday bias of USDCHF has changed to bearish with the current trend. A sustained decline is preferred until minor 0.8920 resistance is attempted. On the other hand, a decisive break of the 0.8858 level could speed up a larger downtrend. On the other hand, a break above the minor resistance at 0.8998 could push the bias back up towards the 0.9187 resistance zone.

The pair has reached a bearish lower high in the past week and now appears poised to test the Jan 6 low at 0.8757. The bearish outlook is supported by the crossing of moving averages 5 and 13 and the reading below 50 on the Relative Strength Index.

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.