USD/CHF Price Analysis: Dragonfly Doji, oversold RSI hints at corrective bounce towards 0.8900

• USD/CHF rebounds from one-week low after posting bullish candlestick.
• Oversold RSI (14) conditions, eight-day-old horizontal support challenges Swiss Franc pair sellers.
• Buyers have a bumpy road towards the north, 0.8940 appears the last defense of bears.

USD/CHF prods the bears around 0.8875 amid Tuesday’s initial European session, after posting a bullish candlestick during early Asia. Adding strength to the recovery moves is the oversold RSI (14) line, as well as the quote’s U-turn from a one-week-old horizontal support zone.

With this, the USD/CHF buyers are likely approaching the 0.8900 threshold. However, a downward-sloping resistance line from April 19, close to 0.8910 at the latest, restricts the immediate upside of the quote.

Following that, a two-week-old descending resistance line, near 0.8940 by the press time, will be crucial to watch as a break of which can quickly propel the USD/CHF price towards the highs marked on April 10 and 03, near 0.9115 and 0.9200 in that order.

It should be noted that the 0.9100 round figure may also act as an extra filter towards the north.

Meanwhile, a downside break of 0.8860 could defy the bullish signals flashed by the “Dragonfly Doji” candlestick and oversold RSI line.

In that case, the USD/CHF bears may approach the year 2021 low near 0.8755 wherein the December 2020 bottom of around 0.8820 may act as an intermediate halt.

USD/CHF: Four-hour chart

Trend: Further recovery expected