The USD/CHF currency pair, on the H4 time-frame, was in a down trend until the 13th of August when a lower bottom was recorded at 0.96600. Demand overwhelmed supply and the downward momentum was invalidated.
A closer look revealed that the Momentum Oscillator displayed positive divergence between point a and b compared to the price at 0.96818 and 0.96600. This could have alerted technical traders to a possible reversal in the progress.
After the bottom at 0.96600 the market broke through the 15 and 34 Simple Moving Average and the Momentum Oscillator broke the zero baseline into bullish territory This further confirmed the possibility of a technical price reversal.
A possible critical resistance level formed when a higher top was recorded on the 14th of August at 0.97723. Sellers are currently trying to push the price lower.
If the USD/CHF breaks through the critical resistance level at 0.97723, three possible price targets may be projected from there. Attaching the Fibonacci tool to the top of the possible reversal at 0.97723 and dragging it to a possible support level at 0.97059, the following targets may be calculated. The first target can be anticipated at 0.98133 (161 %). The second price target can be predicted at 0.98797 (261.8%) and the third and final target may be expected at 0.99871 (423.6%).
If the support level at 0.97059 is broken, the possible scenario is invalidated and will need to be re-evaluated.
As long as buyers maintain a positive sentiment and demand overcomes supply, the outlook for the USD/CHF currency pair on the H4 time-frame will remain bullish.
A closer look revealed that the Momentum Oscillator displayed positive divergence between point a and b compared to the price at 0.96818 and 0.96600. This could have alerted technical traders to a possible reversal in the progress.
After the bottom at 0.96600 the market broke through the 15 and 34 Simple Moving Average and the Momentum Oscillator broke the zero baseline into bullish territory This further confirmed the possibility of a technical price reversal.
A possible critical resistance level formed when a higher top was recorded on the 14th of August at 0.97723. Sellers are currently trying to push the price lower.
If the USD/CHF breaks through the critical resistance level at 0.97723, three possible price targets may be projected from there. Attaching the Fibonacci tool to the top of the possible reversal at 0.97723 and dragging it to a possible support level at 0.97059, the following targets may be calculated. The first target can be anticipated at 0.98133 (161 %). The second price target can be predicted at 0.98797 (261.8%) and the third and final target may be expected at 0.99871 (423.6%).
If the support level at 0.97059 is broken, the possible scenario is invalidated and will need to be re-evaluated.
As long as buyers maintain a positive sentiment and demand overcomes supply, the outlook for the USD/CHF currency pair on the H4 time-frame will remain bullish.