For about two months now, USD/CHF has been caught inside a horizontal channel pattern. Currently, the pair has retested the upper line of the pattern. Besides, it has touched the rising trend line a number of times during its journey upwards. Where is it headed next?
In the wake of continued economic uncertainties in Europe, investors have been staying away from riskier assets. As a result, this risk aversion has boosted the performance of the greenback across the board. And, in the absence of any major economic news from Switzerland, the performance of the USD/CHF has largely been determined by market sentiment.
As earlier mentioned, technical analysis on the USD/CHF reveals it has touched the upper line of the horizontal pattern. If the pair convincingly breaks this level, it may make a new high towards parity. On the other hand, if the pair loses its gains, it may retest the middle of the pattern at 0.9633.
The best case scenario would be to wait and see the direction the pair makes from this level before pulling the trigger. Otherwise, aggressive short term traders can as well place a long entry on the pair and harvest some pips.