USD/CHF Traders Eye Key Resistance for Potential Buy Signal

By Tomasz Wisniewski|

Published: July 04 2024, 06:27 GMT+0

USD/CHF Traders Eye Key Resistance for Potential Buy Signal

Interesting developments are currently unfolding on the American dollar to Swiss franc (USD/CHF) pair. After a two-week upswing that started on June 20th and ended earlier this week, we are now witnessing a bearish correction. The upswing was triggered by a false bearish breakout below the 38.2 Fibonacci level, marked in yellow, which then turned into a strong buy signal as the price climbed above this support. This bullish movement reached a key resistance level at the green downtrend line.

The price perfectly tested this green downtrend resistance and then decided to move lower, confirming the significance of this resistance level. For traders, this green downtrend line is now crucial. Staying below it indicates a negative mid-term sentiment, but a breakout above this resistance, especially if confirmed by a daily or H4 candle closing above it, would generate a strong long-term buy signal.

Therefore, monitoring the green downtrend line is essential. As long as the price remains below it, the sentiment remains bearish. However, a decisive breakout above this line would shift the sentiment to bullish, suggesting further upward movement for the USD/CHF pair.