USD/CHF Price Analysis: Breaking back inside rising channel as bulls reassert control


  • USD/CHF is breaking back inside the rising channel it broke out of last week. 
  • This is probably a sign the dominant uptrend is resuming and prices will go higher. 
  • A close on a 4-hour basis back inside the channel would help confirm the bullish thesis. 

USD/CHF is in the process of breaking back inside its rising channel as the bull trend tries to pick up momentum following a period of weakness. 

Price broke down and out of its rising channel on May 14. The break signaled a possible bearish reversal, however, price failed to make much headway lower. 

The pair recovered after bottoming on May 16 and began clawing its way higher. It has now broken back inside the channel and if the current 4-hour candle ends with a bullish close it will probably signal a resumption of the uptrend after a false break. 

USD/CHF 4-hour Chart


 

The pair has been rising in a channel since the start of 2024. Given the received wisdom that “the trend is your friend” this broad uptrend should continue. 

In the short term the outlook is clarifying. For a while it looked as if the channel breakdown had reversed the short-term trend. However, price rallied and the current candle on the 4-hour has actually penetrated decisively back inside the channel. If the current candle ends on a bullish note it will indicate price has clearly broken back inside its rising channel, and the uptrend should extend quite happily upwards. In such a scenario USD/CHF would be expected to reach close to the 0.9225 highs of the year. 

Until the current period closes, however, it is impossible to assess with any degree of certainty whether bulls have been victorious. It is possible, for example, that price could recapitulate and fall back down to below the red trendline before the current candle closes – invalidating the bullish recovery hypothesis. 

It would require a significant drop to reverse the trend, however, with price needing to break back below the breakout move low at 0.8988 to suggest a reversal and continuation south. 

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