USDCHF Price Analysis: Bear flag keeps sellers hopeful around mid-0.9400s
16.11.2022, 06:07

USDCHF Price Analysis: Bear flag keeps sellers hopeful around mid-0.9400s

  • USDCHF struggles to defend buyers despite bouncing off seven-month low the previous day.
  • Bearish chart pattern, pullback from 21-SMA favor sellers targeting fresh multi-month low.
  • Two-week-old resistance line, 200-SMA acts as additional upside filters.

USDCHF takes offers to reverse the early-day gains around 0.9440 as European traders brace for a busy Wednesday.

In doing so, the Swiss Franc (CHF) extends pullback from the 21-SMA while portraying a bearish flag chart pattern suggesting the quote’s further downside.

Other than the pullback from 21-SMA and the bearish formation, the recent improvements in RSI and sustained trading below the fortnight-old resistance line keep USDCHF sellers hopeful.

That said, a clear downside break of the 0.9370 support appears necessary for the bears to confirm the flag. Following that, the quote becomes vulnerable to testing the 0.8840 theoretical target.

However, early January’s high near 0.9340, February’s top surrounding 0.9150 and the 0.9000 psychological magnet could offer intermediate halts during the anticipated fall.

Meanwhile, recovery moves need to cross the convergence of the 21-SMA and upper line of the stated flag, near 0.9470.

Following that, a run-up towards a two-week-old resistance line, close to 0.9695 by the press time, can’t be ruled out.

In a case where USDCHF remains firmer past 0.9695 and crosses the 0.9700 round figure, the 200-SMA hurdle around 0.9900 will be in focus.

USDCHF: Four-hour chart

Trend: Further downside expected

 

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