USD/CHF Price Forecast: US Dollar remains vulnerable while below 0.8220
The US Dollar (USD) has reversed Tuesday’s gains against the Swiss Franc (CHF) on Wednesday and dives more than 0.5% on the daily chart, as investors ponder the consequences of a sound Democratic victory in the US midterm elections.
On Wednesday, the US Dollar (USD) experienced a decline against the Swiss Franc (CHF) following the outcome of the US midterm elections. The USD/CHF currency pair dropped below 0.8220, indicating a potential Double Top formation at 0.8380. This bearish trend was supported by investors who sold the USD in response to the Democratic Party's victory in Congress and the Senate.
According to ING's Chris Turner, the Democratic Party's control could have a mild negative impact on the US Dollar due to the prospect of a possible government shutdown. However, technical indicators suggest that the immediate upside momentum remains fragile, with the Relative Strength Index and Moving Average Convergence Divergence both pointing towards this vulnerability.
For bulls to take control, the USD/CHF pair would need to break its bearish formation's neckline at 0.8220, aiming for early November highs around 0.8250 and the October 28 high at 0.8313.
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