Short-covering lifts USD/CHF to fresh session high near 0.9600 mark

A fresh bout of US Dollar buying interest during early NA trading session boosted the USD/CHF pair to a fresh session high level of 0.9595 before the pair retraced few pips to currently trade around 0.9580-85 band. 

The sharp up-move witnessed in the last hour could be attributed to short-covering, which helped the pair to end five consecutive days of losing streak. The pair has now recovered some of its sharp losses of over 200-pips recorded during the course of current trading week led by fading expectations of an imminent Fed rate-hike action in 2016, especially after the release of FOMC meeting minutes. 

In absence of any economic releases from the US, bears would be further inclined to book some profits ahead of the weekend that could provide a further lift to the major. 

How strong has the move been?

USD/CHF spot is in overbought territory according to the hourly FXStreet OB/OS Index, while the FXStreet Trend Index is slightly bullish. RSI is in neutral territory at 67.48, up from its last hourly close at 59.95, while ADX is trending above 30 at 38.30, up from 28.05 at the last hourly close.

Looking to a daily chart, we see that RSI is neutral at 31.14. The 200 SMA is currently at 0.9589, down from 0.9701 at the last period close, and declining on the hourly USD/CHF chart. Moving with a downward trend, the exponential average closing price is 0.9726.

What price levels and patterns have to be considered?

With spot trading at 0.9585, we can see next resistance ahead at 0.9597 (Daily High), 0.9602 (Daily Classic R1), 0.9629 (Yesterday's High), 0.9630 (Weekly Classic S2) and 0.9631 (Hourly 100 SMA). Support below can be found at 0.9570 (Daily Classic PP), 0.9568 (Hourly 20 EMA), 0.9552 (Weekly Classic S3), 0.9543 (Monthly Low) and 0.9543 (Weekly Low).

Looking to candlestick patterns, we can see a Piercing Line and Engulfing Bullish formation on the 1-hour chart.