The currency pair moves somehow sideways in the short term and the breakout from the major triangle pattern is not confirmed yet. USD/CHF has increased as the USDX has rebounded, but now the index is trading in the red again and the pair could slip lower as well.
Both USD and CHF are used as safe-haven currencies in this risk aversion situation caused by the COVID-19 pandemic, but it remains to see which one will win the battle. The price action has signaled a potential further increase on the medium to the long term, but we have to wait for confirmation.
USD/CHF is trading in the red according to the H4 chart, it is pressuring the upper median line (UML) of the major red descending pitchfork and the triangle’s resistance. The pair is trapped between the weekly Pivot Point (0.9659) level and the R1 (0.9728) level, only a valid breakout above the R1 and above the 23.6% level will validate a significant upside movement.
Technically, the pair could increase towards the 0.9899 high after the failure to approach and reach the median line (ML) if it stabilizes above the UML, another higher high, a jump above the 0.9726 could confirm this scenario.
You should be careful because a false breakout from the triangle pattern and above the upper median line (UML) will invalidate a potential increase and will signal a significant drop and a downside breakout from this major chart pattern.
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A valid breakout above the R1 (0.9728) and above the 23.6% level will confirm a further increase, the upside targets are seen at R2 (0.9791), at R3 (0.9860) and higher at the 0.9899 – 0.9900 area.
USD/CHF moves sideways, so a failure to stabilize above the upper median line (UML) followed by a valid breakdown below the PP (0.9659) will bring a selling opportunity.
The material has been provided by InstaForex Company – www.instaforex.com
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