USD/CHF registered an amazing drop on Friday and it invalidated a further increase at this moment. The price was rejected by a major dynamic resistance, but the outlook is somehow bullish as long as the price is traded above 0.9761 level.
The US dollar plunged as the USDX has decreased a little on Friday, the minor correction was natural after the extensive upside movement. A further USDX's growth will force the USD to appreciate versus the other major currencies.
USD/CHF has failed to stabilize above the upper median line (UML) of the major descending pitchfork and now it could come to retest the 0.9761 level. Only a valid breakout above the upper median line (UML) will signal a further increase with a potential target at the median line (ml) of the ascending pitchfork.
The pair could drop deeper if it closes today's gap up. Personally, I'm expecting the price to pressure the upper median line (UML) of the descending pitchfork again and I believe that only another false breakout and rejection will really send the rate down towards the lower median line (lml) of the ascending pitchfork.
- Trading Recommendations
USD/CHF was expected to climb higher on the short term after the Inverted Head and Shoulders pattern validation. I've said in my previous analysis that the pair could be attracted by the median line (ml) of the ascending pitchfork. We can search for long opportunities after a valid breakout above the upper median line (UML).
A further increase will be invalidated if the price stays below the UML and if it drops below the 0.9761 static support.
