- USD/CHF is in an uptrend in the short and medium term.
- It is likely to continue rising towards bullish targets.
The USD/CHF displays a textbook bullish trend with alternating upward peaks and troughs on the 4-hour chart.
The pair is likely in an uptrend in both the short and medium term and given the principle in technical analysis that “the trend is your friend”, the odds favor a continuation to the upside.
USD/CHF 4-hour chart
USD/CHF will likely reach the target generated after breaking its September range, at 0.8680, the 100% Fibonacci (Fib) extrapolation of the upward range height. A break above that level could lead to a further extension towards the 0.8750 resistance level (Aug 15 high).
USD/CHF has already reached the conservative target for the range breakout at 0.8627, the 61.8% Fib level. This could mean that bullish pressure could ease.
The Relative Strength Index (RSI) momentum indicator shows a bearish divergence with the price when comparing the lows of October 16 and 17 (dotted red lines on the chart). Although the price made a higher low on October 17 compared to the previous day, the RSI made a lower low. This could point to mild underlying weakness, however, it does not by itself suggest a trend reversal.
A gap opened on the chart on Monday morning and there is a risk that the market could pull back to fill this gap. If so, it could correct up to 0.8574. It would require a break below the previous range highs at 0.8541 to confirm a likely trend reversal.
The long-term trend of USD/CHF probably remains bearish despite the strong recovery in recent weeks.
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.
