USD/CHF has been in a strong downtrend for the start of the year but it appears that the selloff is coming to an end, with reversal forex signals showing up on the 4-hour time frame. The pair has bounced off the .8700 major psychological level and the .8750 minor psychological level in the past weeks, forming a complex double bottom chart pattern.
The pair is still on its way to test the neckline of the reversal forex signals chart pattern though, which means that nothing is set in stone yet. USD/CHF might make its way to the neckline of the formation but a long-term uptrend won’t be confirmed until price is actually able to break above the neckline at .8900.
USD/CHF Reversal Forex Signals Analysis
There’s not much in terms of economic reports from both the US and Switzerland today, which suggests that this pair could be in for a bit of consolidation for a while. Market movement has the path of least resistance to the upside, as monetary policy differences place an upward fundamental bias on USD/CHF pending confirmation from current reversal forex signals.
An upside break above .8900 could last until the .9100 major psychological resistance, as the chart pattern is roughly 200 pips in height. This means that the resulting rally could be of the same size. On the other hand, if the .8900 neckline holds as resistance, USD/CHF could retest the .8700 support and form a triple bottom. This is still a reversal chart pattern or it could be the start of a range.
Bear in mind that the Fed is carrying on with its taper plan, with the prospect of seeing a rate hike around six months after asset purchases end. Meanwhile, the SNB (Swiss National Bank) is intent to keep the franc weak and is willing to intervene if it rallies too much.
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