USD/CHF: Parity on the way, Channel’s support pushing the price towards the North
|USD/CHF has been trapped within an Equidistant Channel on the daily chart. The price had several bounces and rejections on its support and resistance. It had a bounce at its support yesterday as well, and the daily candle closed as a Hammer. Today's intraday price action has been bullish. The price has breached the highest high of yesterday's candle on minor frames. All these equations suggest that the pair may keep heading towards the North until it reaches the channel's upper band, but there are other equations that shall be counted by the buyers.
Let us have a look at the USD/CHF daily chart.
Chart 1 USD/CHF Daily Chart
On the chart above we can observe that the price has been obeying the channel quite nicely. The day before yesterday's, as well as yesterday's daily candles, both had a bounce at the support. The price could have had a bullish day yesterday since the day before yesterday's daily candle was a strong bullish reversal candle. However, yesterday's price action was bearish to start with. Thus the pair could not make a strong bullish move.
Chart 2 USD/CHF Daily Chart
The chart shows that the level of 0.9910 produced a strong bullish daily candle earlier. After having a rejection from the channel's upper band, it had consolidation around the horizontal support. Since the price has found both horizontal and channel support, this may make the buyers interested in buying the pair and push the price towards the North further.
Let us find out what the H4 chart's price action suggests to us.
Chart 3 USD/CHF H4 Chart
The chart shows that the price has produced a Double Bottom at a key level of support. Though the first candle of the current bullish wave was an Inside Bar, it has kept heading towards the North. It breached the neckline of the Double Top, produced a corrective bearish H4 candle, which was followed by an H4 bullish engulfing candle. This is a strong bullish price action which may attract the buyers to go long on the pair today. The next resistance may come at 1.0000, which is the strongest psychological number as far as any currency pairs are concerned.
The daily and the H4 chart both look good for the buyers. The risk and reward ratio seems to be lucrative for the H4 traders, but for the daily traders, it is not as good as they would have liked. A massive psychological number is in the way which must be taken into account before setting Take Profit.
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