25.05.202012:10 Forex Analysis & Reviews: Technical analysis and forecast for USD/CHF on May 25, 2020

Hello, dear colleagues!

Today, we will analyze the technical picture for another major currency pair USD/CHF, and start with the results of the completed weekly trading.

Weekly

Following the results of last week's trading, a candle with a huge lower shadow and a small bearish body appeared on the corresponding timeframe. Usually, such candles signal the market's unwillingness to decline and suggest a subsequent increase in the quote. We will find out how it will be this time only after the current weekly session closes. At the moment, the pair has already managed to rise to 0.9735 but has retreated and is now trading near 0.9718.

The prospects for further price movement on this timeframe are as follows. The resumption of upward dynamics will send the dollar/franc to test past highs of 0.9758 in order to reduce them. If this task turns out to be up to the bulls, then they will have to face very strong resistance from sellers, which passes in the price zone of 0.9785-0.9805. There are two technically strong support levels in this area, and the used moving averages of 50 MA, 200 EMA, and 89 EMA have accumulated.

The downward prospects of this instrument will be signaled by the breakdown of the Tenkan line of the Ichimoku indicator at 0.9651, after which the strength of the support at 0.9637 will be checked again, where the minimum trading values of the last five days are marked. Judging by the last weekly candle with a long tail, the pair has more chances to move in the north direction, but do not forget about the strong indicated resistance.

Daily

On the daily chart, the situation is no less confusing. After May 21, the pair did not want to go down into the Ichimoku cloud and demonstrated significant strengthening. It is very difficult, but it still overcomes Kijun, Tenkan, 50 MA, and 89 EMA. To be honest, I previously assumed that the USD/CHF will not be able to pass up the listed obstacles and the rate will turn to decline. However, this is not happening yet.

In my opinion, much will depend on the ability to break through the resistance of sellers near 0.9760. The situation for players to increase the exchange rate is complicated by finding a 200-exponential moving average here, which can provide quite strong resistance to the pair's attempts to continue the upward dynamics.

If the pair declines and closes the day's trading under the Kijun line (0.9694), there will probably be another attempt by bears to lower the price within the Ichimoku cloud, whose upper limit is near 0.9660. Consolidation within the cloud will strengthen bearish sentiment and give a reason for a further decline to the area of 0.9637-0.9587.

H4

On this chart, the pair broke through the used moving averages, fixed above them, and is now preparing to roll back to the broken moving averages. I suggest that you observe the price behavior in the area of 0.9707-0.9696, and if there are bullish patterns of candle analysis, open purchases with the nearest goals in the area of 0.9735-0.9745.

You can think about sales after the appearance of bearish reversal patterns in the same price zone. Above, you can look at the opening of short positions after rising to the area of 0.9760-0.9780.

At the moment, the situation for the USD/CHF pair is perceived as uncertain. However, we should not forget that in the context of the COVID-19 pandemic, the US dollar is in high demand among investors. However, the Swiss currency is definitely not considered a risky asset.

I wish you a successful trading!