The USD/CHF pair is supported by falling US Treasury yields led by the 10-year.
USD/CHF Forecast: A 4-hour inverted head-and shoulders looms in this chart. However, to confirm its validity we would have to reclaim 0.9373.
The USD/CHF hit a new daily high of 0.9357 overnight. However, USD bulls were unable to regain the neckline inverted head-and shoulders pattern that formed in the 4-hour chart. The USD/CHF falls to 0.9304 and will attempt to cross the 0.9300 mark.
Global equities are showing signs of risk-aversion, as they cannot ignore Russia-Ukraine tensions. The US Dollar Index which measures the greenback’s price against a basket of rivals, rises 0.22% to 98.637, but fails to support the USD/CHF. The 10-year benchmark note fell six basis points to 2.306%, leading to US Treasury yields falling from weekly highs.
USD/CHF Forecast: Technical outlook
The USD/CHF is a positive currency from the daily chart perspective. The USD/CHF pair was exposed to the 0.9297-0.9343 area because USD bulls failed to maintain the exchange rate at 0.9343.
4-Hour chart
In an intraday perspective, the USD/CHF is also biased upward as shown by simple moving averages (SMAs), in a bullish or bearish order. The 50-SMA is above the spot price of 0.9360. This coincides with the neckline and inverted head-and shoulders, which acts as the first resistance.
Noting that an inverted head and shoulders pattern could be developing, the USD/CHF would have to break upwards to confirm right-shoulder formation. The USD/CHF’s first resistance would be the upslope trendline that was drawn from the March 7 lows (around 0.9320). A breach of this trendline could lead to the USD/CHF first resistance at 0.9320. A decisive break could expose the inverted neckline of the head-and shoulders near November 24, 2021. Cycle highs around 0.9360-75 and then the 0.9400 mark.
