USDCHF Analysis: Nearing a Pivotal Resistance

The USDCHF currency pair seems to be drawing its mid-July bullish correction to a close. Stepping back and looking at the bigger picture, there’s a clear downtrend in play. This long-term bearish movement features a pattern of successive lower lows and lower highs. The first half of July was particularly severe for the pair, marking a significant drop.

However, the past few weeks have seen a turnaround, bringing with it a correctional bullish phase. As of now, the price trajectory suggests it’s aiming for a crucial resistance zone. This zone is a confluence of two key resistance levels:

1. Dynamic Resistance: A descending trend line (colored in purple) that has dictated the pair’s long-term downtrend.
2. Horizontal Resistance: A static resistance level (highlighted in yellow).

Should the price react negatively to this combined resistance — for instance, forming bearish reversal patterns like a ‘Shooting Star’ or ‘Bearish Engulfing’ — it could offer a compelling selling opportunity. This would align with the overarching downtrend.

Conversely, a daily close above this resistance zone might shift the narrative, presenting an attractive long position. This scenario would challenge the long-term downtrend and could signify the start of a new bullish phase for USDCHF.

Source: https://www.axiory.com/analytics/technical-analysis/usdchf-analysis-nearing-a-pivotal-resistance