Analyzing the daily chart of USDCHF reveals a significant development as the currency pair recently staged a breakout. The breakout eventuated beyond the pivotal downward trendline and cleared the formidable resistance at 0.8858. This breakthrough effectively opens the door to the prospect of much higher prices, with an initial noteworthy level appearing at 0.9122.
The prevailing trend undeniably favors the bulls, as reflected in a pattern of consecutively higher highs and higher lows. Additionally, the moving averages exhibit a bullish crossover.
The red 21-day moving average has consistently proven to be a robust dynamic support level. Buyers have consistently relied on it as a strategic pivot point to position for further price appreciation. In the event of another potential pullback towards this moving average, it's reasonable to expect buyers to re-engage and leverage it as a support zone once again.
For a more detailed analysis, let's shift our focus to the 4-hour timeframe for a granular examination of USDCHF's dynamics.
Examining the 4-hour chart of USDCHF unveils an intriguing pattern where the currency pair is navigating within a well-defined rising channel. An intriguing observation lies in the sustained divergence with the MACD indicator over an extended period. Such persistent divergence typically indicates diminishing momentum and often precedes either pullbacks or full-scale reversals.
Presently, the price finds itself at the upper boundary of this channel. Given this positioning, there exists a heightened likelihood of witnessing a correction, potentially leading to a retracement toward the lower boundary of the channel.
Chris
Head Trader & Coach