Forex News

• The formation of the Double Bottom chart pattern supports a bullish reversal.
• The asset is on the verge of shifting its business comfortably above the 20-period EMA.
• A range shift by the RSI (14) into 40.00-60.00 indicates a loss in the downside momentum.

The USD/CHF pair is oscillating in a narrow range below the psychological resistance of 0.9500 in the early Tokyo session. The asset witnessed a juggernaut rally on Monday after sensing strength around 0.9410. The US Dollar received significant attention for parking funds by the market participants amid the risk-aversion theme.

The US Dollar Index (DXY) is having a sigh after a vertical rally and is also preparing to extend its rally amid a significant decline in investors’ risk appetite.

On a four-hour scale, the asset has rebounded after forming a ‘Double Bottom’ chart pattern. The formation of the above-mentioned chart pattern indicates a bullish reversal as the asset tested previous lows on November 24 around 0.9388 with less selling pressure.

The major is attempting to cross the 20-period Exponential Moving Average (EMA) at 0.9482, which will turn the short-term trend towards the upside.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the 40.00-60.00 range from the bearish range of 20.00-40.00, which signals a loss in the downside momentum.

Going forward, a decisive move above the psychological resistance of 0.9500 will drive the pair towards the 50-EMA at 0.9572, followed by November 21 high around 0.9600.

Alternatively, a drop below November 24 low at 0.9388 will drag the asset towards November 15 low at 0.9356. A slippage below the latter will expose the asset for more downside towards February 10 high around 0.9300.

USD/CHF hourly chart