Technical Analysis – USDCHF trend signals turn negative after double bearish crossovers
Posted on October 21, 2019 at 12:54 pm GMT
Christina Parthenidou, XM Investment Research Desk
USDCHF tumbled near the key 0.9843 support level that strongly rejected downside corrections in late September. The double bearish crossovers marked by the 20- simple moving average (SMA) falling below the 50- and 200-day SMAs flag that the trend is likely to extend to the downside.
Yet in the short-term, some consolidation cannot be ruled out as the RSI seems to be pushing efforts to deviate above its 30 oversold mark and the MACD looks to be turning upwards in the negative territory and around its red signal line.
Failure to hold above 0.9843, which is also where the 50% Fibonacci of the upleg from 0.9658 to 1.0026 lies, could open the door for the 61.8% Fibonacci of 0.9798. Moving lower, the 0.9772 number could next take control before the 0.9700 round-level comes into scope.
Rallying above the 38.2% Fibonacci of 0.9886, the bulls would aim for the 23.6% Fibonacci of 0.9940 and then for the 0.9989 resistance level, while further up, the next stop could be near the 4-month high of 1.0026 registered earlier this month.
In short, USDCHF looks to be running at the edge of the oversold territory, making upside corrections likely. In terms of trend, though, downside pressure may persist.