• USDCHF confirmed a near-term bearish break below a two-month-old trading range.
  • The subsequent bearish pressure dragged the pair to its lowest level since March 17.
  • Overstretched conditions on intraday charts warrant some caution for bearish traders.
  • The pair remains vulnerable to test the 0.9400 handle before eventually falling further.
  • Any meaningful recovery attempt might confront some fresh supply near 0.9500 mark.

It's Throwback Thursday and this week we will revisit our USDCHF sell call initiated on June 1st. As was expected, the pair struggled to move back above mid-0.9600s and witnessed some aggressive selling since the beginning of this week. Sustained weakness below the key 0.9500 psychological mark added credence to a bearish break through a two-month-old trading range.

The pair subsequently dived to the lowest level since March 17 and seems vulnerable to slide further. However, RSI on hourly charts is already flashing oversold conditions and has moved on the verge of falling below the 30.00 mark. This, in turn, warrants some caution before placing fresh bearish bets or positioning for any further near-term depreciating move.

Nevertheless, the pair still seems vulnerable to slide further towards testing the 0.9400 handle. The downward trajectory could further get extended towards the 0.9330-25 intermediate support before the pair eventually breaks below the 0.9300 mark and aims to test 2020 daily closing lows support near the 0.9250 region.

On the flip side, attempted recovery moves might now confront some fresh supply near the 0.9500 handle. That said, some follow-through buying has the potential to lift the pair back towards the 0.9550 intermediate hurdle. Any subsequent strength is likely to remain capped, rather fizzle out near the mentioned trading range support breakpoint, around the 0.9580 level.