USD/CHF Price Analysis: One Last Hurdle for Bulls to Overcome

• USD/CHF is up more than 8.0% since the beginning of 2024.
• It has broken above some very important levels.
• The question now is, has USD/CHF changed trend?

USD/CHF was in a long-term downtrend until the pair found a bottom in late 2023.

Since then, USD/CHF has progressed steadily higher, gaining more than 8.0% in the first three months of 2024.

An interesting question now is whether, from a technical point of view, the long-term trend has changed from bearish to bullish.

This is important because, as the old adage goes, “the trend is your friend until the final bend.”

In summary, has USD/CHF found its “curve” and advanced enough to reverse its bearish trend?

USD/CHF Weekly Chart

In February, USD/CHF surpassed the last lower high of the previous downtrend that formed in December 2023, at 0.8821. Technical analysts consider it a key level. If the price breaks above it, the chances that the asset has undergone a trend reversal increase.

In March, USD/CHF broke above the red 50-week SMA, another sign that the long-term downtrend could be coming to an end. At the same time, it broke above a long-term downtrend line, providing further evidence that a trend reversal has occurred.

During its rise, USD/CHF has formed two sets of highs and lows (two “higher highs” and two “higher lows”). This suggests a higher probability that the pair could be reversing the trend. If it had only formed a high and a low, it could still be said to be correcting rather than reversing. This is because it could still be a common three-wave ABC correction. However, since two have been formed, this cannot be the case.

Momentum or momentum has been reasonably strong during the move up, although not as strong as the bearish momentum on the corresponding path down – this, unfortunately, is evidence that the move may still just be a retracement within a trend. broader bearish. However, the difference in momentum is slight, reducing the risk of this occurring.

USD/CHF has now reached a formidable resistance band of the 100 and 200-week SMAs that curls just above the current highs at 0.9100. These remain a difficult obstacle for bears to overcome.

To seal the reversal of the long-term bearish trend in USD/CHF, it may need to decisively break above the two major MAs.

A decisive breakout is characterized by the formation of a long green bullish candle that breaks through the MA and closes near its high or three consecutive bullish candles that break above the level.

Another key level is the October 2023 high at 0.9244, which would also need to be broken for there to be sufficient evidence to support the view that USD/CHF has entered an uptrend.

Last week, USD/CHF also formed a bearish candlestick pattern which, if followed by a bearish candlestick this week, would signal a possible short-term bearish reversal. This would keep bearish hopes alive and further delay the time when USD/CHF could be said with any degree of confidence to be in a long-term uptrend.