USDCHF could be in for a reversal from its slide as price is forming an inverted head and shoulders pattern on the 4-hour time frame. A break past the neckline resistance around .8915 could set off a climb that’s roughly the same size as the reversal formation.

The 100 SMA is still below the 200 SMA, though, so the path of least resistance might be to the downside. In other words, there’s still a chance for the selloff to resume.

Then again, the gap between the indicators is narrowing to reflect weakening selling pressure and a potential bullish crossover that could draw buyers in. Price is also moving above both moving averages as confirmation of bullish momentum.

Stochastic is pointing up to show that bullish pressure is in play, and the oscillator has some room to climb before reflecting overbought conditions. Turning lower could mean that sellers are ready to take over and push USDCHF back to nearby support areas. RSI has more room to head north, so price could keep following suit until overbought conditions are met.

The upcoming Presidential inauguration might be the main event risk for the dollar this week. Political protests could be on the headlines and might discourage traders from buying up the dollar, although there’s scope for profit-taking and risk-off flows later on.

Meanwhile, the franc could also take cues from overall market sentiment since there are no major reports queued from the Swiss economy. Note, however, that sentiment is weaker in the European region since there has been a lot of concern about the rapidly increasing number of COVID-19 cases in the area.

Central bank decisions are also lined up throughout the week and might impact overall market sentiment, especially if policymakers show an inclination for more easing measures.