- USD/CHF rises and reaches the first price target for the range breakout.
- The pair is retreating and the RSI threatens to break out of overbought increasing bearish pressure.
- USD/CHF is in a solid uptrend so it should continue rising to the next target after the correction.
USD/CHF is trading in the high 0.8900 zone after breaking the high of a range it had been trading in since Valentine's Day, and rebounding higher.
The pair has risen and reached the conservative breakout target at 0.8984 and is pulling back.
The technical method for setting targets from range breakouts is to take the 0.618 Fib of the range height and extend it from the breakout point upwards.
US Dollar vs. Swiss Franc: 4-hour chart
The next target is at 0.9052, the full height (1.000 ratio) of the extrapolated upward range.
However, a correction is likely before reaching the next target as the Relative Strength Index (RSI) threatens to break out of overbought territory on the current bar. This exit would be a sell signal and would reinforce the idea that a correction is occurring.
If the current 4-hour period ends bearish, the exit from the overbought will be confirmed. This would increase the chances of a continuation of the pullback, potentially to a target at the midpoint of the breakout rally, located at 0.8930.
Beyond that, the pair is seen continuing the short-term uptrend that formed before the range.
A break below 0.8729 would be necessary to suggest a short-term trend reversal and the start of a deeper decline.
The first target for such a move would be the 0.618% extrapolation of the range top at 0.8632, followed by the full extrapolation at 0.8577, which is also close to the January 31 lows at 0.8551, another support level. downward key.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
