USD/CHF Price Forecast – Grinding Through Important Triple-Top Formation

FX Empire Editorial Board
Swiss Franc Notes

Recent price action in the U.S. dollar is showing another attempt to make a clear break above parity against the Swiss franc.  On several occasions, traders bullish on the USD/CHF have failed in their attempts to move into these areas. But bearish traders appear to be in capitulation mode as the market’s psychological levels are slowly being removed. Since last November, this is the fourth time the USD/CHF currency pair has tried to overcome these resistance levels.  But most of the evidence suggests that this most recent attempt could be stronger in terms of its directional influence on the longer-term timeframes.

  • Critical Resistance:   1.00949
  • Critical Support:   0.99525
  • Trading Bias:  Bullish
  • USD/CHF Forex Strategy:  Buy Dip to 0.99600

All of this prior activity has created a triple-top formation on the daily charts, and so a clear break higher from current levels would mark a highly bullish event for those long USD/CHF. Directional behavior in the pair’s moving averages remains supportive, as the 50-day EMA has completed a bullish cross. Indicator readings in the CCI remain healthy, and support in the 0.99525 region looks like it should hold near-term.

USD/CHF Daily Chart

All of that said, it should be understood that the USD/CHF is not exhibiting forceful breakout behavioral activity. This suggests that the price momentum in the pair is insufficient to buy at breakout levels. Instead, traders should be waiting for a moderate drift back into the aforementioned price support before establishing new long positions. The bias remains bullish, and the outlook suggests dip-buying strategies into the 0.99600 should remain viable going forward. Interest rate differentials between the USD and CHF lend themselves well to long-term holdings, so forex traders do not need to be overly aggressive when taking profits on these positions.

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