More downside likely below 0.8500

• USD/CHF struggles for a firm footing near 0.8500.
• More downside looks likely amid weakness in the US Dollar.
• The 20-period EMA is barricading US Dollar bulls from any upside.

The USD/CHF pair finds interim support after refreshing eight-year low near 0.8500. The broader appeal for the USD Index is still downbeat as the market participants are seeing an interest rate cut by the Federal Reserve (Fed) in March after two years of historically faster rate-tightening spell.

Following sideways cues from S&P500 futures, the US indices are expected to open on a lacklustre note. The USD Index has refreshed its five-month low near 101.30 as investors hope that price pressures in the United States are clearly in a downtrend.

The Swiss Franc asset continues to remain upbeat as the Swiss National Bank (SNB) is expected to maintain restrictive monetary policy stance to ensure bringing inflation below 2%.

USD/CHF hovers near the crucial support of 0.8516, plotted from December 22 low on a two-hour scale. The 20-period Exponential Moving Average (EMA) around 0.8544 continues to act as a strong barrier for the US Dollar bulls.

The Relative Strength Index (RSI) (14) oscillates in the bearish range of 20.00-40.00, which indicates that the bearish momentum is intact.

Going forward, a downside move below December 22 low around 0.8516 would drag the asset towards 0.8450 and the round-level support of 0.8400.

On the contrary, a recovery move above December 27 high of 0.8550 would drive the asset towards December 26 high at 0.8580, followed by December 21 high at 0.8633.

USD/CHF two-hour chart