Technical Bias: Neutral
Key Takeaways
Technical Analysis
There is a wedge pattern forming on the 4 hour chart for the USDCHF pair. The recent run towards the upside failed right around the wedge resistance trend line, which was also coinciding with the 76.4% Fibonacci retracement level of the last drop from the 0.9041 high to 0.8860 low. There is an awkward candle formed around the same confluence zone, which suggest that the US dollar buyers failed to break the barrier and sellers might take control in the coming sessions. However, it would be very difficult for the US dollar sellers to gain pace considering there are several supports on the way down for the pair. Initial support can be seen around the 50 simple moving average (SMA) on the 4 hour timeframe at 0.8950. However, the most important one resides around the wedge support trend line, which almost coincides with the 200 SMA (4H). In short, there might be a crucial break in the coming days either towards upside or downside in the USDCHF pair.
RSI Trend Line
There is a trend line forming on the RSI as well, which might overlap with the wedge support. So, if it breaks, then it might open the doors for a move lower in the pair.Overall, as long as the pair stays below the 0.9000 resistance level the chance of a break lower is more compared to a move higher.
Key Takeaways
- Increase in volatility caused a lot of moves in the US dollar this week against the Swiss franc.
- USDCHF pair climbed towards the 0.9000 level, but failed to close above the same which can be seen as a critical failure.
- USDCHF support seen at 0.8850 and resistance ahead at 0.9010.
Technical Analysis
There is a wedge pattern forming on the 4 hour chart for the USDCHF pair. The recent run towards the upside failed right around the wedge resistance trend line, which was also coinciding with the 76.4% Fibonacci retracement level of the last drop from the 0.9041 high to 0.8860 low. There is an awkward candle formed around the same confluence zone, which suggest that the US dollar buyers failed to break the barrier and sellers might take control in the coming sessions. However, it would be very difficult for the US dollar sellers to gain pace considering there are several supports on the way down for the pair. Initial support can be seen around the 50 simple moving average (SMA) on the 4 hour timeframe at 0.8950. However, the most important one resides around the wedge support trend line, which almost coincides with the 200 SMA (4H). In short, there might be a crucial break in the coming days either towards upside or downside in the USDCHF pair.
RSI Trend Line
There is a trend line forming on the RSI as well, which might overlap with the wedge support. So, if it breaks, then it might open the doors for a move lower in the pair.Overall, as long as the pair stays below the 0.9000 resistance level the chance of a break lower is more compared to a move higher.
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