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USDCHF fails to extend its decline
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Stochastic dives in oversold area
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Bearish outlook in near term
USDCHF is finding strong support at 0.8825, which has been failing to break since March. The short-term picture is bearish, as the pair stands well below the two-and-a-half month descending trend line.
The market is also traveling slightly beneath the 200-day simple moving average (SMA), which is currently acting as an important resistance level. According to the technical oscillators, the stochastic is still diving beneath the 20 level; however, the RSI is pointing marginally up near the 30 region.
If there is an aggressive move below the 0.8825 support level, then the price could rest near the 0.8730 line before meeting 0.8550, endorsing the bearish tendency.
On the flip side, a climb back above the 200-day SMA could open the door for a challenge of the 20- and 50-day SMAs at 0.8960 and 0.8990, respectively. Also, the downtrend line looks to be a real struggle for the bulls to overcome and change the outlook to positive.
In a nutshell, USDCHF is bearish as long as it holds below the 200-day SMA and the uptrend line. In case the pair violates this line, bulls could take the upper hand.
