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The US dollar is starting to move higher against the Swiss franc currency as the close inverse price correlation with the euro currency starts to kick-in once again.
Usually, we see the EURUSD and USDCHF pairs moving in the opposite direction. This is what is commonly known as a mirror relationship in currency trading.
With the fundamental backdrop for the eurozone increasingly challenged it is therefore likely that we could the USDCHF pair moving back towards the best levels of the year.
A recent channel breakout on the lower time frames could hold the key to further price gains ahead for the USDCHF pair. This week it is really important the price remains above the channel.
If this remains the case then bulls need to turn the short-term trend bullish again by anchoring the price above the 0.9700 level across the four-hour time frame.
The fundamental backdrop is currently not supportive for further USDCHF glosses as well. This is to say that the interest rate and policy divergence between the FED and the SNB is widening, and the Ukraine war not being helpful to European nations.
Bullish sentiment is also starting to drop, as traders start to become frustrated with the lack of upside breakthrough over recent weeks.
Negative sentiment has dropped since this week to 54 percent. This relatively neutral sentiment bias is likely to signal more minor upside or range bound trading for the USDCHF in the short-term.
USDCHF Short-Term Technical Analysis
The four-hour time frame continues to show that the USDCHF pair is breaking through trendline resistance from a large falling price channel, around 0.9600.
Additionally, the moving averages from the 50 and 200-periods on the mentioned time frame are crossing over. Bulls really need to anchor the price above the 0.9700 level to secure further gains.
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USDCHF Medium-Term Technical Analysis
Looking at the daily time frame, we are currently seeing a big rejection from the top of a falling price range, around the 0.9900 level.
The USDCHF pairs looks to be headed much lower if it fails here, and the bottom of the range is currently located around the 0.9450 level, which appears to be the next bearish target. A move above 0.9700 remains key for the bulls here.
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