USD/CHF Rally Keeps RSI in Overbought Zone

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USD/CHF extends the advance from the start of the week to keep the Relative Strength Index (RSI) above 70, and the exchange rate may further retrace the decline from the November high (0.9113) as it appears to be tracking the positive slope in the 50-Day SMA (0.8659).

USD/CHF Rate Outlook

USD/CHF trades to a fresh yearly high (0.9044) as an upward trend takes shape, and the overbought reading in the RSI is likely to be accompanied by a further advance in the exchange rate like the price action from last year.

A close above the 0.9030 (38.2% Fibonacci extension) to 0.9040 (23.6% Fibonacci extension) area brings the November high (0.9113) on the radar, with the next area of interest coming in around 0.9180 (23.6% Fibonacci extension).

However, failure to test the November high (0.9113) may push USD/CHF back towards the 0.8880 (38.2% Fibonacci retracement) to 0.8910 (38.2% Fibonacci extension) region, and the exchange rate may negate the upward trend if it fails to hold above the moving average.

--- Written by David Song, Strategist