USDCHF: Short-term selling pressures waning

USD/CHF remains in a declining channel. However, the significant lower shadows in the last two daily candlesticks suggest potential waning short-term selling pressure. Support can be found at 0.8864 (38.2% retracement of the rise from the 2011 low, see also the low of the long-term declining channel). Hourly resistances stand at 0.8966 (23 October 2013 high) and 0.9005 (18 October 2013 low).

In the longer term, a decisive break of the support area defined by 0.8931 (24 February 2012 low) and 0.8864 (38.2.2% retracement) would open the way for a medium-term move towards 0.8568 (27 October 2011 low). Thus far, given the overall oversold conditions, we consider such a medium-term decline to be unlikely.