USD/CHF is expected to continue its downside movement. The pair recorded lower tops and lower bottoms Since May 11, which confirmed a bearish outlook. The downward momentum is further reinforced by the declining 50-period moving average. The relative strength index is below its neutrality level at 50. In addition, key resistance at 0.9850 (the high of May 17) should limit the upside potential.
On the economic data front, MBA mortgage applications declined 4.1% in the week ending May 12 compared with an increase of 2.4% in the prior week.
To conclude, below 0.9850, expect a new drop to 0.9740 and even to 0.9695 in extension.
Resistance levels: 0.9885, 0.9910, and 0.9950
Support levels: 0.9740, 0.9695, and 0.9670
