After forming a higher peak and other two lower peaks, the USD/CHF has formed a nice-looking head and shoulder pattern. Currently, the pair has broken and retested the neckline of the pattern. Will it go down?
The recently released SECO consumer climate report gave a reading of -17 for July against the expectation of the market of -4. The June figures came in at -8. The worse-than-expected figures indicated that consumer confidence worsened substantially during the month of July. The performance of the Swissy has been weighed down by this poor economic report. In the coming days, USD/CHF is likely to trade at the mercy of market sentiment as no major data is expected from Switzerland.
As earlier mentioned, technical analysis points out that USD/CHF has formed a head and shoulder pattern. If the pair starts climbing the charts, it may encounter an immediate resistance at the recent high level of 0.9860. On the other hand, if it starts falling, it may encounter an immediate support level at 0.96110.
Since it has retested its broken neckline, it is likely that the pair will resume the downward trend. As such, traders who were long in the pair should continue holding on to their positions until the next support level. However, they should be wary of any false moves.
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.