USD/CHF Approaching the Apex of a Symmetric Triangle

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USD/CHF Approaching the Apex of a Symmetric Triangle

USD/CHF rallied to a new high on the year at the end of last week, hitting 0.9740 before retreating. When we look at at the 1H chart, we are seeing that since last week’s price action, USD/CHF has been coiling in a triangle, and is approaching the apex, ready to break out.

USD/CHF 1H Chart 11/12
usdchf 1h chart 11/12

(click to enlarge)

Triangle Apex: When we look in the 1H chart, we can see that as USD/CHF approaches the apex, it is in a mini-consolidation above 0.9620 and below 0.96.

Bearish breakout: If price breaks below 0.9620, it would break below the triangle. Considering that in the 1H chart, the RSI has tagged 30, and held below 60 and price is below the 200-, 100-, and 50-hour simple moving average (SMA), we can expect some further bearish attempt since last week’s high. In the very short-term, we can see 0.9570 as a target.

Bullish breakout: A break above 0.9675 would push above the triangle resistance, the moving averages, and likely bring the 1H RSI above 60, which would show loss of bearish momentum. Considering that the trend was bullish heading into this week, we should anticipate a rally to 0.97, 0.9740, and possibly higher at least toward the 0.98 handle.

USD/CHF 4H Chart 11/12
usdchf 4h chart 11/12

(click to enlarge)

Looking at the 4H chart, we can see this triangle extending back to the end of October. We can also see a persistent uptrend. The bullish breakout outlook is preferred because of the potential of pushing above the current high of 0.9740, especially since the RSI just tagged 40 and is showing support there.

To the downside, if price can starting holding below 0.9625, we still need to first limit the bearish outlook to 0.9550-0.9560 area. This is the origin of the “triangle”, and a previous support/resistance pivot area. The 200-period SMA also resides around 0.9560.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.