Recovery remains elusive below confluence of 0.9945 resistance

  • USDCHF picks up bids to print first four daily gains.
  • The easing of the bearish bias in the MACD, the sharp rebound from fortnight-old support keeps buyers hopeful.
  • The weekly resistance line challenges intraday buyers ahead of the key hurdle comprising 200-SMA, 50% Fibonacci retracement level.

USDCHF extends the previous day’s rebound from a fortnight-old support zone at 0.9870 early Wednesday morning in Europe. In doing so, the Swiss currency pair (CHF) has been jostling with a downward sloping resistance line since last Friday.

Given the quotation’s successful rebound from the key short-term support area around 0.9840, coupled with the recently mitigated bearish bias in the MACD, USDCHF prices should remain firmer.

As a result, the quote may overcome the immediate trendline hurdle near 0.9875, which may allow buyers to target the 61.8% Fibonacci retracement level of the late September-October rise in the pair, close to 0.9900.

It should be noted, however, that a convergence of the 200-SMA and the 50% Fibonacci retracement level near 0.9945 appears to be a difficult problem for USDCHF bulls to resolve and trigger the pullback by the after.

If the quotation remains firmer beyond 0.9945, the probability of witnessing a rise towards the parity level cannot be excluded.

Alternatively, the aforementioned horizontal support near 0.9840 limits short-term declines for USDCHF, a break of which could direct the bears to the previous monthly low near 0.9780 and then to the 0.9740 level comprising the low at the end of September.

USDCHF: four-hour chart

Trend: Limited recovery expected

Eleanor C. William