USD/CHF Price Prediction: Uptrend in doubt as bad omens make an appearance
|- USD/CHF has broken below a key level bringing the uptrend into doubt.
- Other band omens are also appearing suggesting the possibility of a bearish shift in the trend.
USD/CHF is at risk of tipping into a downtrend and reversing its short and medium-term bull trend, as it extends its pullback below a key level. Other “bad omens” also make their appearance on the price chart, suggesting a risk of more downside.
USD/CHF Daily Chart
USD/CHF has found support at the (green) 200-day Simple Moving Average (SMA) at 0.8822 and although it could still mount a recovery from its current level and thereby rescue the uptrend, the evidence is building for a possible reversal and start of new downtrend. Given “the trend is your friend” such a reversal would suggest a bearish bias then dominating.
The pair has broken below the key 0.8801 November 9 swing low and although it failed to close below the level, the breach is still a bearish indication.
The pair formed a Two-Bar reversal pattern (red rectangle on chart) at the November 22 and 23 highs which is bearish. This happens when a long green candle that reaches a peak is followed by a long red candle of a similar size. It is a sign of a reversal in sentiment and a signal of more downside to follow.
The Relative Strength Index (RSI) momentum indicator has formed a Double Top pattern (red ellipse) which is bearish for momentum and consequently also price.
A break below the 0.8797 November 27 low would confirm a change in the short-term trend and more downside to targets at 0.8748 (August 14 high), and 0.8615 (November 4 low).
That said, if price remains above the November 27 low and recovers, it could signal a resumption of the uptrend.
If so, a break above the 0.8958 November 22 high would probably confirm a continuation up to the next target at 0.9000 (round number and psychological area), followed by 0.9050 (July 2 swing high).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.