USDCHF has been trending lower on its 4-hour time frame, moving inside a descending channel formation. Price got rejected on its test of resistance and is now in the middle of the channel.
A bit of consolidation is seen as the middle of the channel typically holds as an area of interest. If it acts as strong support, another bounce to the top of the channel around .9800 might be seen. But if it gives way, USDCHF could carry on with its drop to the channel support at .9300.
The 100 SMA is crossing below the longer-term 200 SMA to indicate that selling pressure is taking hold. However, RSI is on the move up and showing that buyers are still in control while stochastic is heading north so USDCHF could follow suit.
The main event risks have already passed for both the US and Swiss economy this week, as the FOMC and SNB decided to keep policy unchanged. The Fed downgraded growth forecasts for this year and the next, leading market watchers to push back rate hike expectations further. Meanwhile, the SNB reiterated that it is watching FX levels closely so the threat of intervention might still be imminent.
The next catalyst for a big move is scheduled next week as the EU referendum is coming up. Brexit polls have had a significant impact on CHF price action as a lead in favor of the “leave” camp has led to safe-haven flight to the franc while the opposite has sparked declines.
EU referendum campaigning has been suspended for today until the weekend after the fatal shooting of Member of Parliament Jo Cox. Still, a lot of action could be seen as the last batch of opinion poll results are released and traders position ahead of the main event.