USD/CHF seems determined to resume the bullish momentum on the Daily chart. It is trading at 0.9772 level, right above the 0.9761 broken static resistance. The US dollar remains very strong on the short term as the USDX has managed to climb higher.
USD/CHF has developed an Inverted Head & Shoulders pattern on the daily chart and now it could confirm it and it could resume the upside movement. The question is: where are the upside targets?
USD/CHF has failed to reach and retest the median line (ML) of the descending pitchfork, it has failed to stabilize below 0.9645 static support, that's why I'm expecting the price to come back at least till the upper median line (UML). The chart pattern could be validated if the price consolidates above the 0.9761, the first target is at the UML, but the major target is seen at the median line (ml) of the minor ascending pitchfork.
- Conclusion and Recommendations
Personally, I would like to see a strong consolidation above 0.9761 level before the price tries to take out the UML dynamic resistance and to approach the median line (ml). If the pattern is confirmed, USD/CHF could increase by 150 pips in the upcoming days. A valid breakout above the UML could signal a broader upside movement.
The potential upside movement could be invalidated if the price fails to stay above the 0.9761 or to break out above the UML. Stochastic is overbought, so the today's drop is somehow natural.
