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November 17, 2022

USDCHF has extended its recovery

- The Greenback bulls will get strengthened after an upside break of the accumulation phase.

- A Spring formation around 0.9400 to remain a major support area ahead.

- The 20-and 50-EMAs are on the verge of delivering a bull cross.

The USDCHF pair has extended its recovery after overstepping the immediate hurdle of 0.9458 in the Tokyo session. The asset has been underpinned as investors have preferred to turn risk-averse amid geopolitical tensions between North Korea and the US. North Korea warned on Thursday of "fiercer military responses" to U.S. efforts to boost its security presence in the region with its allies, says Reuters.

Meanwhile, the US dollar index (DXY) is aiming to test Wednesday’s high around 106.78. The 10-year US Treasury yields have shown a mild recovery to near 3.73%.

USDCHF has delivered a breakout of the inventory accumulation phase in which inventory shifts from retail participants to institutional investors. Earlier, the asset rebounded after forming a Spring around 0.9400 support. This marks a selling climax, followed by a responsive buying action.

The 20-and 50-period Exponential Moving Averages (EMAs) are on the verge of delivering a bearish crossover of around 0.9450. Meanwhile, the Relative Strength Index (RSI) (14) is attempting to shift into the bullish range of 60.00-80.00.

Going forward, a decisive move above Monday’s high at 0.9489 will drive the asset towards November 10 low at 0.9630, followed by November 9 low at 0.9800.

On the flip side, a drop below Spring formation around 0.9400 will drag the pair towards January 31 high at 0.9343. Slippage below the latter will drag the major towards March 31 low around 0.9200.

USDCHF hourly chart

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