USD/CHF Price Analysis: Advances firmly above 0.9600, as bulls eye the 20-DMA

  • The USD/CHF bounces off weekly lows and is back above 0.9600.
  • Risk appetite remains dampened, US equities tumble, and the greenback rise, underpinned by elevated US Treasury yields.
  • USD/CHF Price Forecast: The major is upward biased, though a daily close above 0.9660 would exacerbate a rally towards the 20-DMA.

On the week’s last trading day, the USD/CHF jumps from weekly lows erasing Thursday’s losses, gains 0.56% as the New York session wanes. At the time of writing, the USD/CHF is trading at 0.9626, reflecting a downbeat mood and a strong US Dollar, underpinned by high US Treasury yields.

Sentiment stills negative on investors’ US recession fears

Risk aversion dominates Friday’s trading session. US equities point to a lower close, losing between 0.83% and 2.36%, on the same narrative since the beginning of the week. Investors’ fears that an aggressive Federal Reserve might cause a recession lurks. Alongside supply chain disruptions, which worsened with China’s Covid-19 crisis, which seems to be left behind, and Russia’s invasion of Ukraine, remain issues that keep market players uneasy.

The USD/CHF Friday’s price action opened near 0.9570 and dipped towards the S1 daily pivot near 0.9552. Nevertheless, buyers entered the market around the European open and rallied sharply, though hesitated, at the time of the US Nonfarm Payrolls report release, though reached a daily high at 0.9642.

USD/CHF Price Forecast: Technical Outlook

The USD/CHF is upward biased, and in fact, buyers reclaimed the 50-day moving average  (DMA) at 0.9595. Nevertheless, the Relative Strength Index (RSI), albeit pointing upwards, remains in bearish territory. If USD/CHF buyers would like to exacerbate a move towards the 20-DMA at 0.9757, they would need a daily close above June 1 high at 0.9660.

Therefore, the USD/CHF first resistance would be the previously mentioned 0.9660. A break above would expose the 0.9700 figure, followed by the confluence of the 20-DMA, and the May 20 high around the 0.9757-64 range

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