• Fails to capitalize on the overnight bounce and faces rejection near 200-DMA.
  • The near-term set-up might have already turned in favour of bearish traders.

The USD/CHF pair failed to capitalize on the previous session's positive move and met with some fresh supply on Thursday. The pair has now dropped back closer to two-week lows, with bears challenging a support marked by the lower end of a near two-month-old ascending trend-channel.
Meanwhile, technical indicators have been gaining bearish traction on hourly charts and drifting lower on the daily chart. Given that the overnight attempted bounce faced rejection near the very important 200-day SMA, the near-term bias might have already shifted in favour of bearish traders
The prevalent cautious mood, amid nervousness ahead of the crucial US-China trade talks, supports prospects for an eventual breakdown. Hence, sustained weakness below the 0.9900 handle would set the stage an extension of the recent pullback from the 1.0025-30 supply zone, or four-month tops set last week.
The pair then could accelerate the slide further towards 0.9860-55 horizontal support before eventually dropping to test the 0.9800 round-figure mark.
On the flip side, any attempted bounce might continue to confront some fresh supply near mid-0.9900s (200-DMA), above which a bout of short-covering has the potential to lift the pair back towards the key parity mark en-route the recent swing highs, around the 1.0025-30 region.

USD/CHF daily chart

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