USD/CHF Double Bottom Complete; Price Above 200-day SMA

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The CHF has been tracking the EUR since the SNB “pegged” the CHF to EUR. As EUR/USD falls, we are also seeing a rally in USD/CHF.

USDCHF Daily

usdchf 5/23

The daily chart shows the EUR/USD completing a double bottom as price breaks above the 0.8952 resistance. Also note that price is pushing above the 200-day SMA, another sign that the market is shifting away from the prevailing bearish mode.

The double bottom is a sign that the market is sideways. Note that the oscillators are starting to show overbought condition in the daily chart.

If after the break above 0.8952, there is a pullback, the ability to hold above the middle of the bottom pattern (around 0.8850), would establish a higher low, and thus add to the case of a bullish trend developing.

The weekly chart shows that the market is sideways. Direction is unclear, but the mode could be just a consolidation after a swing from 0.7070 to 0.9970.

USDCHF Weekly Chart
usdchf 5/23

Bullish within consolidation:
In this consolidation scenario, the break above 0.8952 opens 0.9158 resistance pivots, and a falling trendline from April 2013.

Support:

There is still downside risk toward the 0.8570 support/resistance pivot.If price falls back below 0.8850, the market might put the focus back on 0.87, and then 0.8570.

Earlier: Gold (XAU/USD) Threatens Triangle Resistance

To contact the reporter of this story, email Fan Yang at fan@forexminute.com

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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.