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USD/CHF Technical Analysis: Flirting with 200-hour SMA support, around 0.9715 region

  • USD/CHF extended Friday’s retracement slide from two-week tops.
  • The downside seems cushioned amid the prevailing risk-on mood.

The USD/CHF pair witnessed some follow-through selling on Monday and extended the previous session's rejection slide from a resistance marked by 61.8% Fibonacci level of the 0.9832-0.9646 downfall.

The pair slipped below 38.2% Fibo. level but seems to have found some support near 200-hour SMA, which should act as a key pivotal point for short-term traders and help determine the near-term trajectory.

Meanwhile, technical indicators on the daily chart maintained their bearish bias and have again started gaining negative momentum on hourly charts, supporting prospects for a further near-term depreciating move.

Hence, some follow-through weakness, possibly towards testing the 0.9675 horizontal zone, now looks a distinct possibility, albeit a combination of supporting factors might help limit the downside, at least for the time being.

The prevailing risk-on mood – amid optimism over the long-awaited phase-one trade deal between the world's two largest economies – might continue to weigh on the Swiss franc's perceived safe-haven assets.

This coupled with a modest pickup in the US dollar demand – supported by a goodish pickup in the US Treasury bond yields – might further lend some support to the major, rather attract some dip-buying at lower levels.

USD/CHF 1-hourly chart

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