USDCHF extended its losses for a seventh day, dropping to 3½-month lows. The pair found support at the 200-day moving average where it bounced off a low of 0.9717. The pair has retraced about 55% of the August-November upleg from 0.9257 to 1.0327, taking it below the Ichimoku cloud in the process.
Momentum indicators are pointing to strong downside bias but with RSI just above the oversold level and the stochastics already in that territory, further losses may be limited. Any rebound is likely to lead it to resistance at the 50% of the Fibonacci retracement level of the August-November upleg at 0.9790. The next resistance would come at the 38.2% Fibonacci level around 0.9920.
If prices breached below the 200-day moving average and the 61.8% Fibonacci level at 0.9665, this would underline the current bearish bias.
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