- USD/CHF is struggling to extend the upside above 0.9280, upside seems favored amid the upbeat market mood.
- The US Dollar Index (DXY) has shifted its auction above 102.50 as Fed might not pause its policy tightening spell.
- A pullback move to near 10-period EMA will present a bargain buy for the market participants.
The USD/CHF pair is facing fragile barricades after a perpendicular rally to near 0.9280 in the early Asian session. The Swiss franc asset is expected to display a volatility contraction before resuming its upside journey as the US Dollar seeks more strength for further upside.
S&P500 settled Friday with significant losses as the stronger-than-projected United States Nonfarm Payrolls (NFP) report faded expectations of a pause in the policy tightening spell by the Federal Reserve (Fed). The US Dollar Index (DXY) has shifted its auction above 102.50 and is expected to continue its upside momentum ahead.
USD/CHF has sensed long liquidation after a vertical rally to near the horizontal resistance placed from January 24 high around 0.9280. The Swiss franc asset needs more strength for printing more gains. Therefore, the major might demonstrate some volatility contraction before resuming its upside journey.
The Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, showing no signs of divergence but an overbought situation cannot be ruled out.
A minor pullback move to near the 10-period Exponential Moving Average (EMA) at 0.9233 will trigger a bargain buy opportunity, which will drive the asset towards January 31 high at 0.9288. A break above the latter will expose the asset to January 12 high around 0.9360.
On the flip side, a breakdown of Wednesday’s low at 0.9059 will drag the major toward 4 August 2021 low at 0.9018. A slippage below the latter will drag the asset further toward 10 May 2021 low at 0.8986.