This USD pair has been trading sideways recently but also appears to be forming a short-term reversal pattern.
So, will the USD/CHF pair remain stuck in consolidation or could it head towards the upside soon?
You better keep this neckline resistance level on your radar!
USD/CHF currency pair over 4 hours Chart by TradingView
What’s next for the US dollar now that the Fed surprised markets by cutting interest rates by 0.50% and signaling more monetary easing?
The USD/CHF pair fluctuated during the actual announcement and the press conference, but eventually resumed its upward movement to approach the resistance range visible on the 4-hour time frame.
Can the pair continue to rise above this ceiling?
Remember that directional biases and volatility in market prices are usually driven by fundamental factors. If you haven’t done your homework on the USD and CHF yet, it’s time to take a look at the economic calendar and stay up to date with the daily fundamental news!
As you can see from the chart above, range resistance is near the 0.8550 minor psychological mark, R1 (0.8550) and the dynamic inflection point of the 200 simple moving average, which means it could attract sellers to step in. If so, watch for a move back to range support near the 0.8400 and S1 (0.8420) levels.
On the other hand, a break above near-term resistance could complete what appears to be a triple bottom reversal pattern.
In this case, stay alert in case long green candles indicate that there is a sustainable bullish atmosphere in play, which could take the USD/CHF pair to the next upside targets at R2 (.8600) and then R3 (.8680).
Finally, keep in mind that the Swiss National Bank is due to announce its monetary policy this week and there are expectations of another rate cut, so this could lead to more volatility for the USD/CHF pair and its related forex pairs.
Don’t forget to practice proper risk management and stay aware of top-tier market triggers when trading this product. Good luck!
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