USD/CHF Price Analysis: Stability below inverted flag warrants downside to near 0.9450
22.06.2022, 23:39

USD/CHF Price Analysis: Stability below inverted flag warrants downside to near 0.9450

  • A downside break of an inverted flag has bolstered the Swiss franc bulls.
  • The 20- and 50-EMAs are trending southwards, which signals a bearish bias.
  • The RSI (14) has shifted into a bearish range which adds to the downside filters.

The USD/CHF pair is juggling in a narrow range of 0.9581-0.9625 in the early Asian session after a downside move below the critical support of Friday’s low at 0.9619. Sustainability below the critical support for a sufficient time dictates that the asset bulls have accepted their defeat and are aiming for an imbalance auction on the downside.

On an hourly scale, the asset has given a downside break of the Inverted Flag chart formation. A downside break of the above-mentioned chart pattern indicates that the inventory distribution is over now and the asset is ready for a markdown phase.

The 20- and 50-period Exponential Moving Averages (EMAs) at 0.9630 and 0.9650 respectively are scaling lower, which adds to the downside filters.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into a bearish range of 20.00-40.00, which signals more downside ahead.

A minor rebound towards Friday’s low at 0.9619 will be a selling opportunity, which will activate the Swiss franc bulls and will drag the asset towards May 27 low at 0.9545, followed by March 16 high at 0.9460.

On the flip side, the greenback bulls could regain control if the major overstep Friday’s high at 0.9733, which will send the asset towards June 9 high at 0.9817. A breach of the latter will drive the asset towards June 14 low at 0.9874.

USD/CHF hourly chart

 

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