The US dollar has regained its strength as the USDX has managed to bounce back in the short term. USD/CHF moves sideways according to the H4 chart, we'll have a clear direction when the price will escape from this pattern.
Both USD and CHF are used as safe-haven currencies in the current COVID-19 epidemic situation, but it seems that the Dollar could win the battle and it could appreciate versus the Swiss Franc again. USD/CHF has decreased on the short term as the USD has taken a hit from the US economic data and from the FED, but a USDX's rally will signal another leg higher on this pair.
USD/CHF is trapped between the weekly Pivot Point (0.9695) and the S1 (0.9594) levels, a valid breakout from this range will bring a trading opportunity. If you'll look closer, USD/CHF has developed a triangle, this pattern could be a continuation one, but we have to wait for a confirmation that the price will resume the upside movement.
- TRADING RECOMMENDATIONS
USD/CHF has retreated as much as 50% after the amazing rally, now has failed to stabilize below the 38% retracement and to approach the 50% retracement level again signaling that the corrective phase is completed and we may have another important increase.
Technically, a valid breakout above the upper median line (UML) of the red descending pitchfork could validate a potential increase towards the 0.9899 high as the price has failed to reach the median line (ML) of this pitchfork.
We'll have a buying opportunity after a valid breakout above the upper median line (UML), above the weekly Pivot Point (0.9695) level and above the triangle's resistance, the Stop Loss could be placed somewhere below the S1 (0.9594), while the first major target is seen at the 0.9899 high, near the R3 (0.9909) level.
A potential upside movement could be invalidated if the price makes a valid breakdown from the triangle chart pattern and below the S1 (0.9594) level. If this scenario takes shape, USD/CHF could drop towards the 61.8% level and towards the S3 (0.9436) level.
