USD/CHF Price Analysis: Hesitates extending 200-SMA breakout within triangle, 0.8840 in focus

• USD/CHF clings to mild gains after four-week uptrend.
• Upbeat RSI, clear break of 200-SMA keeps buyers hopeful.
• 10-week-old descending resistance line adds to the upside filters.
• One-month-old horizontal support prods the Swiss Franc pair sellers.

USD/CHF stays defensive around 0.8770 heading into Monday’s European session as it edges higher past 200-SMA within a fortnight-old symmetrical triangle. In doing so, the Swiss Franc (CHF) pair struggles to justify the US Dollar’s strength amid the risk-off mood, as well as backed by the firmer Treasury bond yields. It’s worth noting that the fresh debt woes from China join the cautious mood ahead of the FOMC Minutes and indecision about the Fed’s next move weighs on sentiment and puts a floor under the quote.

Also read: USD/CHF remains range-bound around 0.8770 ahead of Swiss data, US Retail Sales

Technically, an upside clearance of the 200-SMA joins the upbeat RSI (14) line, not overbought, to favor the USD/CHF buyers.

It’s worth noting that a successful upside break of the two-week-old symmetrical triangle, currently between 0.8740 and 0.8780, becomes necessary for the USD/CHF bulls to retake control.

Even so, a downward-sloping resistance line from May 31, close to 0.8840 at the latest, can challenge the Swiss Franc (CHF) pair buyers before giving them control.

On the contrary, a downside break of the stated triangle’s support line surrounding 0.8740 isn’t an open welcome to the USD/CHF bears as a one-month-old horizontal support area around 0.8640-30 appears a tough nut to crack for the pair sellers.

In a case where the USD/CHF remains bearish past 0.8630, the odds of witnessing a slump towards the yearly low marked in July around 0.8550 can’t be ruled out.

USD/CHF: Four-hour chart

Trend: Further upside expected