USDCHF : THE RALLY TAKES A BREAK
- The market was trading inside a bullish channel since the beginning of 2024 ; the mid-term trend was then bullish.
- With the establishment of a new 7-months high at 0.9225 in early May 2024, the market's bullish trend has been invalidated with a bearish flag consolidation pattern, previously forecasted by a bearish divergence between prices and the MACD indicator.
The market has registered multiple impacts above the 23.6% Fibonacci retracement at 0.90135, highlighting the fight between buyers and sellers over that zone.
This price action takes place as investors await for more development on the monetary front in the US, waiting for the next batch of inflation measures in the region, that should shape the mid-term market sentiment for the pair.
- Bearish flag patterns are usually seen as normal, and even healthy, when occurring after a long market rally. They underline the fact that investors need to catch their breath prior to taking the market to new highs.
This, combined with the fact that monetary policies are likely to remain restrictive for the rest of 2024 in the US, makes the continuation of the USD rally the most likely scenario.
However, the 0.90135 zone is seen as crucial here, and any break-out below that level could unlock a threatening downside potential for the market.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
- With the establishment of a new 7-months high at 0.9225 in early May 2024, the market's bullish trend has been invalidated with a bearish flag consolidation pattern, previously forecasted by a bearish divergence between prices and the MACD indicator.
The market has registered multiple impacts above the 23.6% Fibonacci retracement at 0.90135, highlighting the fight between buyers and sellers over that zone.
This price action takes place as investors await for more development on the monetary front in the US, waiting for the next batch of inflation measures in the region, that should shape the mid-term market sentiment for the pair.
- Bearish flag patterns are usually seen as normal, and even healthy, when occurring after a long market rally. They underline the fact that investors need to catch their breath prior to taking the market to new highs.
This, combined with the fact that monetary policies are likely to remain restrictive for the rest of 2024 in the US, makes the continuation of the USD rally the most likely scenario.
However, the 0.90135 zone is seen as crucial here, and any break-out below that level could unlock a threatening downside potential for the market.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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