USD/CHF Pulls Back Ahead of July High

USD/CHF pulls back from a fresh monthly high (0.9022) to keep the Relative Strength Index (RSI) below oversold territory, but a move above 70 in the oscillator is likely to be accompanied by a further advance in the exchange rate like the price action from earlier this year.

USD/CHF Rate Outlook

The recent rally in USD/CHF appears to be stalling ahead of the July high (0.9051) as it struggles to push above the 0.9030 (38.2% Fibonacci extension) to 0.9040 (23.6% Fibonacci extension) area, and lack of momentum to extend the recent series of higher highs and lows may push the exchange rate back towards the 0.8880 (38.2% Fibonacci retracement) to 0.8910 (38.2% Fibonacci extension) zone.

Next region of interest comes in around 0.8770 (61.8% Fibonacci extension) to 0.8800 (50% Fibonacci extension), but USD/CHF may continue to trade to fresh monthly highs should the bullish price series persist.

A break/close above the 0.9030 (38.2% Fibonacci extension) to 0.9040 (23.6% Fibonacci extension) area raises the scope for a test of the July high (0.9051), with the next area of interest coming in around 0.9180 (23.6% Fibonacci extension).

--- Written by David Song, Senior Strategist at FOREX.com