USDCHF Shallow Bearish Channel

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USDCHF formed lower highs and lower lows inside a bearish channel on its 1-hour time frame. Price recently bounced off the resistance and is down to the mid-channel area of interest, which seems to be holding as support.

The 100 SMA is below the longer-term 200 SMA for now to indicate that bearish momentum is in play. However, the gap between the indicators has narrowed enough to show that bearish momentum has slowed and that a bullish crossover may be in order. Price seems to be finding support at the 100 SMA dynamic inflection point at the moment.

RSI is heading up to indicate that bullish momentum is in play, possibly taking price to the channel top. Stochastic is also heading higher to signal that bullish pressure is present, but the oscillator is already approaching the overbought region to signal exhaustion.

A continuation of selling pressure, on the other hand, could still send USDCHF to the channel bottom around the .9660 level or lower. A break past the channel top could lead to a reversal from the downtrend.

US retail sales data is up for release next, with the headline figure slated to show a 0.3% uptick, slightly slower than the earlier 0.4% gain, and the core figure projected to post another 0.4% gain.

There are no major reports due from the Swiss economy for the rest of the week, leaving the franc sensitive to risk sentiment. Recall that the lower-yielding currency was able to benefit from risk-off flows related to US-China trade tensions, but traders might also be wary of SNB intervention if the currency rallies too strongly.

The FOMC minutes are up for release next week, and traders might also be bracing themselves for dovish remarks from policymakers or clues of another rate cut.

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