USD/CHF: Is a correction on the horizon?
A look at the bigger picture confirms the bullish trend of the USDCHF. In an interim rally at the end of last week, the market tried to break the previous high of 13 November 2018. It came close, failed to break the old high, with several candles. Nevertheless, the market recorded a new three-month high of 1.0097 over the last few days.
Although the MACD is above its trigger line, it is flat. This could indicate that the indicator is about to turn in. The MACD histogram has formed a divergence. A divergence means that the indicator no longer reflects the price movements. The market shows higher prices, but the indicator does not continue to rise. This is visible in the histogram. Divergences are usually resolved in the direction of the indicator. In this case, this could indicate an impending correction.
If the market moves downwards, there are several possible supports. The first is in the 1.001 range and then in the 0.995 and 0.990 range, respectively.
Parity has special psychological significance. If the price falls significantly and sustainably below 1.0000, the chances of further short-term price increases could be curbed.
For further rising prices, the pair must overcome the highs in the range of 1.009 to 1.013. The first resistance then waits in the area of 1.017. A successful breach of this barrier would confirm the upward trend and pave the way towards 1.025, which was identified by the peak at the turn of the year 2016/2017.
USD/CHF Daily Chart | Source: ActivTrader
Written by Daniel Schuetz, External Analyst
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