Since the beginning of this month, USD/CHF has been forming lower highs and lower lows. As a result, the pair has now formed a near-perfect descending channel pattern. Currently, the pair is about 40 pips shy of the top of the pattern.
The recently concluded Greek elections that implied that the country would continue to be a member of the European bloc has made investors to stay away from the low-yielding currencies in favor of the higher-yielding ones. This has made the dollar to realize consistent gains across the board. In the coming days, traders will be keen on the developments of Greece’s political situation as it will have an effect on the price action of the low-yielding franc.
As earlier mentioned, technical analysis on the USD/CHF reveals it is trading in a descending channel pattern. Immediate resistance is found at the upper line of the pattern at 0.9550. A confirmed break above this could expose 0.9600. On the other hand, immediate support is found at the middle of the pattern, at 0.9480. A confirmed break below this could make price extend to the bottom of the pattern, at 0.9400, or lower.
The best case scenario would be to wait for price to either convincingly bounce off or break the upper line of the pattern before pulling the trigger. Otherwise, if you place a trade now, you may be caught on the wrong side of the trade.
DISCLOSURE & DISCLAIMER: THE ABOVE IS FOR INFORMATIONAL PURPOSES ONLY AND NOT TO BE CONSTRUED AS SPECIFIC TRADING ADVICE. RESPONSIBILITY FOR TRADE DECISIONS IS SOLELY WITH THE READER.