USD/CHF Struggles at 0.9350

The Swiss franc benefits amid a risk-off market mood, as reflected by the USD/CHF down 0.25%. Falling US Treasury yields, led by the 10-year, underpin the USD/CHF pair.

Overnight, the USD/CHF reached a daily high at 0.9357, but a risk-off market mood, which benefitted the low-yielder Swiss franc, impeded USD bulls to reclaim the neckline of an inverted head-and-shoulders pattern forming in the 4-hour chart. At 0.9304, the USD/CHF slides and aims to test the 0.9300 mark.

Risk-aversion is back, as reflected by global equities, which could not shrug off Russia-Ukraine tensions. Meanwhile, the US Dollar Index, a gauge of the greenback’s value against a basket of its rivals, advances 0.22%, sitting at 98.637 but failing to underpin the USD/CHF. US Treasury yields are dropping from weekly highs, led by the 10-year benchmark note falling six basis points down at 2.306%.

From the daily chart perspective, the USD/CHF is upward biased. However, USD bulls faltering to keep the exchange rate above 0.9343 exposed the pair to the 0.9297-0.9343 range.

The USD/CHF is also upward biased from an intraday perspective, as depicted by the simple moving averages (SMAs) in a bullish order. However, the 50-SMA lies above the spot price at 0.9360, almost confluence with the neckline of the inverted head-and-shoulders, acting as the first resistance level.

It is worth noting that an inverted head-and-shoulders pattern could be forming, but the USD/CHF would need to break upwards to confirm the right-shoulder formation. That said, the USD/CHF first resistance would be an upslope trendline drawn from March 7 lows, around 0.9320.

Breach of the latter could push the price towards the 50-SMA at 0.9360. A decisive break would expose the inverted head-and-shoulders neckline near November 24, 2021, cycle high around 0.9360-75, followed by the 0.9400 mark.