The US Dollar has found support at 0.7955, after retreating from highs near 0.8020 against the Swiss Franc on Monday. Recent price action keeps the upside trend from late December lows in play, although technical indicators show a weakening momentum.
The pair’s bearish pressure stemming from the escalation of the conflict between the US government and the Federal Reserve (Fed) seems to have abated, and investors are looking from the sidelines on Tuesday, awaiting the release of the US CPI report, to place directional bets on the US Dollar.
Technical Analysis: USD/CHF trades within an expanding wedge
The USD/CHF paid trades at 0.7977 after bouncing from 0.7955 lows. Price action shows an expanding wedge, a figure highlighting an emotional market, and often anticipating a bearish outcome. Technical indicators show a neutral-to bearish momentum.
The Moving Average Convergence Divergence (MACD) has slipped marginally below the zero line, and the Relative Strength Index (RSI) hovers around the 50 line, which reflects a lack of a clear bias.
Immediate support is in the confluence between trendline support and Monday’s low, around 0.7955. If this level gives way, the next target is the January 2 and 6 lows at the 0.7900-0.7905 area. To the upside, a previous support at 0.7985 (January 9 low) is holding bulls right now and closing the path to Monday’s high, at 0.8020, and the wedge top, now at 0.8035.
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
