Rebounds from ascending trend-channel support near 0.9900 handle

  • The pair stalls its recent pullback from multi-month tops set earlier this month.
  • Technical set-up turns neutral ahead of the crucial US-China trade negotiations.

The USD/CHF pair extended its recent pullback from over four-month tops and dropped to the 0.9900 neighbourhood on Tuesday. Bulls, however, managed to defend a support marked by the lower end of a near two-month-old ascending trend-channel.
 
The pair seesawed between tepid gains/minor losses through the early European session on Wednesday and held above the mentioned support. This is likely to act as a key pivotal point for short-term traders and help determine the pair’s near-term trajectory.
 
Given the pair’s inability to sustain above the parity mark and repeatedly failures near the 1.0025-30 supply zone, the price action now seems to suggest that the near-term bullish run might have already run out of the steam and support prospects for further downside.
 
However, technical indicators on hourly/daily charts have struggled to gain any meaningful traction and failed to support of any firm near-term direction, warranting some caution before placing any aggressive bets amid uncertainty surrounding the US-China trade talks.
 
Meanwhile, any attempted bounce from the trend-channel support is likely to confront some fresh supply near the very important 200-day SMA – around mid-0.9900s, above which the pair seems all set to aim back towards surpassing the key parity mark.
 
The momentum could further get extended even beyond the recent swing highs, around the 1.0025-30 region, towards challenging a resistance marked by the top end of the mentioned trend-channel – currently near the 1.0065-70 area.
 
On the flip side, sustained breakthrough the 0.9900 handle might now confirm a bearish breakdown and pave the way for an extension of the recent pullback towards testing the next major support near the 0.9860-55 horizontal zone.

USD/CHF daily chart

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