As already noted in today's reviews for the euro and the pound, at the auction on May 17-21, the US dollar suffered losses to the vast majority of its main competitors. The Swiss franc was no exception, which last week strengthened against the US dollar by 0.43%. At the same time, it is characteristic that the franc shows growth against the USD at the same time as the price of gold rises. This factor is likely reflected in the conditions of sharp upward jumps in inflation in the United States, rather than the demand for the franc as a safe asset. Although, all this of course has a mutual connection. The only question is the extent of this very connection. The improvement of the situation with the COVID-19 vaccination in Europe and the gradual recovery of the economy in most European countries also have an impact on the fairly strong positions of European currencies, in general, and the Swiss franc, in particular. If we return to the sharp, but as Fed officials say, temporary increase in inflation, then its resumption may continue in the near future to support the Swiss currency in a pair with the US dollar. And now let's go directly to the analysis of the technical picture for USD/CHF, and using the Friday close of the last trading week, we will start with this time period.
Weekly Time frame
As you can see, after the fall of 0.9900-0.8756, the pair made a fairly deep correction, the degree of depth of which can be judged by reaching the level of 61.8 Fibo level. According to the classics, the correction of the exchange rate above 50% of the previous movement is no longer a correction, but a trend change, but for quite a long time the market has been experiencing deep corrective pullbacks above the 50th level of the Fibonacci grid, after which the previously shown price movement takes on a second wind, that is, it resumes. Here is the current technical picture for USD/CHF just from this category. It is characteristic that the pair tried to start climbing the week before last, but could not even reach the level of 0.9100, and from 0.9092 it again moved to a downward trend. Given that the blue Kijun line of the Ichimoku indicator and the 50 simple moving average converged slightly higher at 0.9114, if the bulls try to raise the quotes again, they will face serious difficulties in the price zone of 0.9090-0.9115. Well, upon writing this article, the pair is calmly trading near 0.8974, and can not yet gain a foothold above the most important technical and psychological level of 0.9000. In truth, only a confident passage of this important mark will allow bulls to test the strength of a strong resistance area of 0.9090-0.9115. To continue maintaining control over the pair, the bears need to break through the support at 0.8870. If this condition is met, they will have the opportunity to return to the January lows of the current year at 0.8756 and try to update the current annual lows.
Daily Time frame
On the daily chart, the situation is more transparent if such a comparison is appropriate in the current situation. We are talking about a fairly narrow trading range of 0.8952-0.9046, indicated by dark blue levels. At the same time, in addition to the upper limit of the indicated range, the pair may meet resistance in the form of the red Tenkan line (0.9022) and the 23.6 Fibo level from the fall of 0.9900-0.8756.
If we move on to trading recommendations for USD/CHF, then the main one is selling the pair, after corrective bounces to price zones 0.8990-0.9040 and slightly higher, after possible rises in the price area 0.9080-0.9110. Buying appears to be a more risky positioning since it is against the current downward trend. To open long positions, it is better to enlist the support of candlestick analysis reversal patterns on the weekly or daily charts.
