USD/CHF has formed lower highs and found support around the .7900 major psychological handle, creating a descending triangle on its 4-hour time frame.
Is it due for a breakout soon?
Better watch out for candlestick patterns at these inflection points!
USD/CHF 4-hour Forex Chart by TradingView
TACO trades aren’t exactly doing the U.S. dollar any favors these days, as Trump’s tendency to backpedal on his bombshell announcements is weighing on the currency’s outlook and credibility as safe-haven asset.
In contrast, the lower-yielding Swiss franc has been raking in risk-off flows these days, thanks in part to its positive correlation to gold.
Can USD/CHF go for a triangle breakdown next?
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The pair has tested the triangle support at S3 (.7890) a couple of times already this week, suggesting that bears are making another attempt to break below it. If this happens, USD/CHF could set its sights on the next downside targets at S4 (.7860) then S5 (.7830).
On the other hand, reversal candlesticks forming at current support levels would hint that dollar bulls are keen on defending the floor, possibly leading to a bounce to near-term resistance zones.
In this case, look out for a bounce back to S2 (.7920) or a more sustained climb to S1 (.7980) then the pivot point level (.8010) closer to the triangle top and a major psychological ceiling.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
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