Swiss Franc: Is downside risk against the US Dollar increasing? - UOB

Overbought short-term conditions have not ruled out a test of 0.8290 for USD/CHF, although sustained gains beyond that level have limited scope, according to Quek Ser Leang and Lee Sue Ann of United Overseas Bank (UOB). The pair extended its sharp advance to 0.8278. Over the next 1–3 weeks, upside momentum is gathering following a neutral outlook; a daily close above 0.8290 could pave the way for 0.8320, as long as strong support at 0.8230 remains intact.

Can a break above 0.8290 confirm the bullish outlook?

"24-HOUR VIEW: Last Friday, USD rose sharply to a high of 0.8255. Yesterday, when USD was at 0.8250, we indicated that “the rapid rise could extend, but a clear break above 0.8265 appears unlikely.” USD rose more than expected to 0.8278 before settling at 0.8271 (+0.27%). Conditions are overbought after the sharp rise over the past two days, but there is scope for USD to test 0.8290. A sustained advance above this level is unlikely. Support is at 0.8250."

"1-3 WEEKS VIEW: We revised our USD view from negative to neutral yesterday (26 Oct, spot at 0.8250). We indicated that “downward momentum has faded.” We also indicated that USD “has likely entered a range-trading phase between 0.8200 and 0.8290.” We did not quite expect USD to approach 0.8290 so quickly as it rose to a high of 0.8278. Upward momentum is starting to build, and if USD closes above 0.8290, it could rise to 0.8320. To sustain the momentum buildup, USD must not break below 0.8230 (‘strong support’ level)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)