Is the dollar in the face of more losses?
Check out the reversal formation that I am watching on the 4-hour chart of USD/CHF.
The pair is close to completing the head and shoulders pattern, as the price approaches the neckline support level at 0.88900, a key psychological sign.
USD/CHF 4-hour forex Planned by TV
How low can USD/CHF fall if it breaks below the neckline?
Well, the chart pattern extends close to 250 pips, so we might just see a sell-off at the same height!
Technical indicators still reflect bullish sentiment, though. In other words, there is a possibility that the support will hold.
For example, the stochastic is already falling into the oversold zone to reflect exhaustion among the sellers. A shift higher means that the buyers are ready to take over, possibly lifting the pair to the area of interest at 0.9000.
The 100 SMA is also above the 200 SMA to indicate that the support is more likely to hold than to be broken. Then again, the gap between the moving averages is narrowing to indicate the possibility of a bearish cross occurring soon.
The SNB’s decision may be worth watching as this decision trades, as another decisive tightening move from the SNB could put it in a much more hawkish position compared to the Federal Reserve.
On the other hand, hints that they may stop interest rate hikes soon could mean a sharp sell-off in the franc.