Wednesday, July 6, 2016

Bullish flag on the USD/CHF

On the daily chart of the USD/CHF we can see that the price has formed what it appears to be a bullish flag formation, which usually acts as a continuation pattern. The 200 day exponential moving average, blue line, is very horizontal, which indicates that we should be suspicious of the visits that the price makes to that moving average, due to the fact that sometimes the price breaks it, but other times it bounces from it. The price has really been consolidating between the 0.9700 as support and the 0.9800 as resistance. If the price breaks to the upside, then the 0.9900 level may act as resistance. Since the price could also break to the downside, even though there is a higher probability of a bullish breakout, it may go to the 0.9600 level, which could act as support.

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