Swiss Franc: Downside risk builds against US Dollar - UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that USD/CHF extended its rapid rise to 0.8278, leaving short-term conditions overbought but still allowing scope for a test of 0.8290, with limited potential for sustained gains above that level. On a 1–3 week horizon, upward momentum is building from a previously neutral stance, and a daily close above 0.8290 could open room toward 0.8320, provided 0.8230 holds as strong support.

Watching 0.8290 for bullish confirmation

"24-HOUR VIEW: Last Friday, USD rose sharply to a high of 0.8255. Yesterday, when USD was at 0.8250, we indicated that “the rapid rise could extend, but a clear break above 0.8265 appears unlikely.” USD rose more than expected to 0.8278 before settling at 0.8271 (+0.27%). Conditions are overbought after the sharp rise over the past two days, but there is scope for USD to test 0.8290. A sustained advance above this level is unlikely. Support is at 0.8250."

"1-3 WEEKS VIEW: We revised our USD view from negative to neutral yesterday (26 Oct, spot at 0.8250). We indicated that “downward momentum has faded.” We also indicated that USD “has likely entered a range-trading phase between 0.8200 and 0.8290.” We did not quite expect USD to approach 0.8290 so quickly as it rose to a high of 0.8278. Upward momentum is starting to build, and if USD closes above 0.8290, it could rise to 0.8320. To sustain the momentum buildup, USD must not break below 0.8230 (‘strong support’ level)."