Technical Analysis – Is the downtrend over for USDCHF?
May 18, 2023 7:27 amVideo
Latest News
- Market Comment – Yen spikes on suspected intervention; big week awaits the dollar April 29, 2024
- Forex forecast 04/29/2024: EUR/USD, GBP/USD, USD/JPY, EUR/JPY, GBP/JPY and BTC from Sebastian Seliga April 29, 2024
- Federal Reserve encounter troubles April 29, 2024
- Technical Analysis – EURUSD attempts recovery from 5-month low April 29, 2024
- USD/JPY: trading tips for beginners for European session on April 29 April 29, 2024
- EUR/USD: trading tips for beginners for European session on April 29 April 29, 2024
- Video market update for April 29, 2024 April 29, 2024
- Technical Analysis – US 500 cash index is in the green ahead of the Fed April 29, 2024
- Technical Analysis – Gold weakens its momentum April 29, 2024
- Forecast for EUR/USD on April 29, 2024 April 29, 2024
- Forecast for GBP/USD on April 29, 2024 April 29, 2024
- Forecast for USD/JPY on April 29, 2024 April 29, 2024
- Key events on April 29: fundamental analysis for beginners April 29, 2024
- Trading plan for GBP/USD on April 29. Simple tips for beginners April 29, 2024
- Trading plan for EUR/USD on April 29. Simple tips for beginners April 29, 2024
- Analysis of GBP/USD on April 26th. The pound trades on Friday without changes April 26, 2024
- USD/JPY: Simple trading tips for novice traders on April 26th (US session) April 26, 2024
- GBP/USD: Simple trading tips for novice traders on April 26th (US session) April 26, 2024
- EUR/USD: Simple trading tips for novice traders on April 26th (US session) April 26, 2024
- GBP/USD: trading plan for the US session on April 26th (analysis of morning deals). The pound attempted, but it didn’t go April 26, 2024
USDCHF has been building a base in the form of an inverse head and shoulders (H&S) pattern around a two-year low of 0.8850 over the past month, boosting hopes for a bullish trend reversal.
Traders are currently waiting to see whether the pair will find enough buyers to confirm the bullish structure above the 0.9000 neckline, and more importantly, mark a new higher high above the crucial 2023 constraining zone of 0.9070. Notably, the descending trendline, which connects the highs from November 2022, is located in the same area.
The RSI and the MACD are sending encouraging signals, with the former stretching its uptrend above its 50 neutral mark and the latter strengthening above its red signal line and towards the positive region. Yet, the Stochastic oscillator is warning that a continuation of the consolidation phase or a downside correction cannot be ruled out as the indicator flatlines near its 80 overbought level.
In the positive scenario, where the price closes above 0.9070, the next obstacle could emerge around 0.9155. Not far above, the resistance line drawn from June’s 2022 peak could be more demanding, around 0.9200. If the price successfully breaches that bar, the spotlight will turn to the 0.9300 psychological mark. Then, the pair will attempt to upgrade the medium-term outlook above the 200-day simple moving average (SMA) at 0.9400 and the March high of 0.9439.
Alternatively, a pullback below 0.9000 could initially halt near the 20-day SMA at 0.8918. If not, the bears will attempt to re-activate the downtrend below the 0.8855-0.8850 region with scope to reach the support line from September at 0.8755. Slightly lower, the longer-term descending line from May could be another ideal area for a pivot.
In a nutshell, USDCHF seems to have set the ground for a positive trend reversal, though only a sustainable recovery above 0.9070 would verify the case.
Related Posts: