In today’s analysis, we’ll be looking at the USDCHF on the 4hr time.
The pair hasn’t been exciting in terms of overall price action during recent sessions. But the reason it’s found it’s a way to our chart of the day is primarily due to the emergence of this Descending triangle pattern shown above.
Note we see a series of lower highs while the lows around the 0.9850 level remain relatively static. Also, price action is currently testing the downward trendline, where we may expect some initial resistance and drop in demand as sellers return to seek some value in the market.
Should a sell-off appear in the short-term, we would be looking at the most apparent downside target of 0.9850 as the first potential downside target.
But if we are purely basing targets off of this descending triangle pattern, we would take the height of this move and apply it as shown.
This analysis gives us a longer-term target in the region of 0.9650, which was also key support back in August this year.
Adding further speculation to a potential downside move for USDCHF, we see the pair is currently sitting in overbought territory on the RSI indicator.
And on the daily chart, we’ve been in a similar position a few times already this year with 96.50 acting as key support so traders may already be in familiar territory for the pair.
Lastly, if we consider some of the fundamental snippets surrounding trade wars and geopolitical tensions, then the CHF may see some increased demand in a more risk-off environment.
By Adam Taylor
Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs. Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.