Over the weekend I pointed out how the USDCHF bulls are refusing to go down without a fight. Less than 48 hours into the new trading week buyers are once again pressuring trend line resistance from the current 2017 high.
Another thing I mentioned over the weekend was my lack of interest in shorting the pair. The bounce from the multi-year range low at 0.9435 suggests that demand will likely continue to outweigh supply.
I’ve always maintained the idea that a market is range bound until it isn’t. In other words, as long as 0.9435 holds as support on a daily closing basis, a move higher toward 1.0100 must be respected.
However, buyers aren’t out of the woods just yet. Although the 0.9770 horizontal level is somewhat of a wash, the trend line from the 2017 high is very much in play.
It’s going to take a daily close (5 pm EST) above it to open the door to upside targets. The first being the April and May highs near 1.0100.
For those keeping track, the trend line in question appears to come in at 0.9810 at the time of this writing. A close above it would have us watching for a buying opportunity on a retest of the level as new support.
Notice how the price action of late has started to ‘cluster’ near trend line resistance at 0.9810. It’s one of my favorite ways to identify a pending reversal and suggests that a breakout is imminent.
But again, without a daily close above the level, there’s nothing to confirm the break. And the market has a twisted way of teaching lessons to those who enter prematurely. As they say, good things come to those who wait.
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