USDCHF 1D Death Cross can be bullish short-term

The USDCHF pair confirmed our bearish signal more than a month ago and broke below the 1D MA50 (blue), 1D MA200 (orange) and 1W MA100 (red trend-line) in succession. While at this, it broke below both Higher Lows trend-lines that started on the January 06 2021 market bottom, thus confirming the long-term shift from bullish to bearish.

The emerging 1D Death Cross though (MA50 crossing below the MA200), while a long-term bearish formation, it can be bullish short-term. The reason is that while the price has been on Lower Lows, the 1D RSI is a Higher Lows i.e. a Bullish Divergence. Since the Jan 06 bottom, the two similar RSI Bullish Divergencies, ended up with rebounds.

Even during the last registered 1D Death Cross, the pair had again a 1D RSI Bullish Divergence that made a short/ medium-term rebound above the 1D MA200 and the previous Lower High and resumed the downtrend after it closed below the 1W MA100 again.

As a result, unless we make a break below last week's low, we are short-term bullish on the USDCHF, targeting the 1D MA200 and then turn bearish again. If however we break below the recent Low first, we will change back to selling and target the lower Supports in succession: 0.90900, 0.89300 and 0.87600.


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