USD/CHF Price Analysis: Upside bias intact ahead of Fed Powell’s speech
06.02.2023, 23:37

USD/CHF Price Analysis: Upside bias intact ahead of Fed Powell’s speech

  • USD/CHF is displaying a lackluster performance after reaching to near the 0.9280-0.9290 supply zone.
  • Fresh commentary from US President that the balloon incident doesn’t weaken US-China relations might improve risk appetite.
  • An acceptance above the 0.9280-0.9290 supply zone is required for a fresh upside.

The USD/CHF pair is demonstrating a loss in the upside momentum after reaching to near the round-level resistance of 0.9300 in the early Tokyo session. The Swiss franc asset is struggling to extend gains ahead of the commentary from Federal Reserve (Fed) Chair Jerome Powell.

Risk-perceived assets remained jittery on US-China tensions and fresh risk of United States recession amid deepening expectations of further policy tightening by the Fed. However, fresh commentary from US President Joe Biden that the balloon incident doesn’t weaken US-China relations might improve the risk appetite of the market participants.

The US Dollar Index (DXY) is expected to remain lackluster after a three-day winning streak as investors await fresh triggers for acceptance at elevated levels.

After reaching to the supply zone in a 0.9280-0.9290 range, USD/CHF has sensed barricades amid an absence of acceptance signs at elevated levels. The Swiss franc asset is showing an inventory adjustment, which conveys that the US Dollar is gathering strength for a confident breakout.

The 20-period Exponential Moving Average (EMA) at 0.9267 is acting as a major support for the US Dollar bulls.

Meanwhile, the Relative Strength Index (RSI) (14) has yet not surrendered the oscillation in the bullish range of 60.00-80.00, which indicates that the upside momentum is still active.

Going forward, a break above the supply zone in a 0.9280-0.9290 range will expose the asset to January 12 high around 0.9360 followed by the round-level resistance at 0.9400.

On the flip side, a breakdown of Wednesday’s low at 0.9059 will drag the major toward 4 August 2021 low at 0.9018. A slippage below the latter will drag the asset further toward 10 May 2021 low at 0.8986.

USD/CHF hourly chart

 

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