USD/CHF Price Analysis: Buyers reclaim 0.9200 after a 100 pip drop

• USD/CHF recovers from a 120 pip drop from the European session.
• Lower US T-bond yields capped the recovery of the USD/CHF pair.
• USD/CHF: A daily close above the Wednesday low increases the odds for another leg-up.

The USD/CHF trims Thursday’s losses barely declines 0.09%, trading at 0.9234 during the New York session at the time of writing. The Swiss franc strengthened against the greenback earlier in the European session, sending the pair tumbling towards Thursday’s daily low at 0.9198. However, despite still below the day’s open, the buck is staging a comeback and jumped almost 120 pips from the daily lows.

Meanwhile, the US Dollar Index, which measures the greenback’s performance against a basket of its peers, is slumping 0.05%, at 93.97, underpinned by the US T-bond 10-year yield struggling to hold to the 1.5’% threshold, sits at 1.519%, down three basis points.

USD/CHF Price Forecast: Technical outlook

Daily chart

The USD/CHF is in an uptrend, depicted by the daily chart, showing the daily moving averages (DMA’s) located below the spot price, acting as dynamic support levels. In fact, Thursday’s price action briefly broke below the 50-DMA, which lies at 0.9215 but bounced off, approaching Wednesday’s low of 0.9235.

For dollar buyers to resume the upward trend, they need a daily close above the Wednesday low. In that outcome, the USD/CHF will find its first resistance at 0.9300. A breach of the latter could push the pair towards the confluence of the March 9 and the September 30 highs around the 0.9375-0.9368 area, which was unsuccessfully tested two times.

On the other hand, failure at the Wednesday low could send the pair tumbling towards the 50-DMA. A sustained break below that level could push the USD/CHF towards the 100 and the 200-DMA, at 0.9166 and 0.9132, respectively.

The Relative Strenght Index (RSI) is at 47, edging slightly low, indicating that USD/CHF could have another leg down.

KEY ADDITIONAL LEVELS TO WATCH