Following the October 20 break of trend line resistance, the USDCHF went on to gain 200 pips. However, buyers ran into a wall of offers at 1.0035 in late October and early November and have struggled ever since.
But if we translate the lows at 0.9435 as a double or even triple bottom, the pair hasn’t yet reached the intended target. The range between 0.9435 and 0.9770 has a distance of 335 pips, which puts the objective at 1.0100.
It just so happens that the 1.0100 area was responsible for capping the April and May rallies. Seeing that helps to reinforce the idea that the USDCHF may be preparing to move higher from current levels.
Moreover, a look at the 4-hour chart shows what appears to be a descending broadening wedge.
Just like a falling wedge, a descending broadening structure like this often foreshadows a turn higher.
Those looking for additional confirmation can use the 0.9940 handle. It has served as somewhat of a pivot in recent weeks. If buyers can secure a daily close at 5 pm EST back above 0.9940, it would offer additional evidence that the bulls have regained control.
To the upside we have the October high at 1.0035. A close above that would expose the range objective at 1.0100.
Keep in mind that the USDCHF has been ranging between 0.9435 and 1.0330 since late 2015. As such, an eventual move back to the multi-year range top at 1.0330 should not be ruled out.
As long as buyers hold prices above 0.9850, I will maintain a relatively bullish outlook for the USDCHF. The area served as key support between January and May of this year before breaking down on May 17.
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