USD/CHF Potential Uptrend – August 31st 2020

On the Daily chart, the RSI oscillator formed a bullish divergence suggesting either a corrective wave up or a trend reversal.

Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.

This analysis was done on MetaTrader 4.

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Analysis Details:

USD/CHF symbol on the MT4 platform

Type: Bullish

Key support levels: 0.9018, 0.9000

Key resistance levels: 0.9045, 0.9076, 0.9220

Price Action:

On the Daily chart, RSI oscillator formed a bullish divergence suggesting either a corrective wave up or a trend reversal. As long as price remains above 0.9000 psychological support, USD/CHF is expected to rise towards the 0.9220, which is a 23.6% Fibonacci retracement level confirmed by the 50 Exponential Moving Average.

USDCHF Daily Chart August 31st 2020

Back on August 19, the price cleanly rejected the 761.8% Fibonacci retracement level at 0.9018. This could be the key support and in order for the price to rise, daily close must remain above it. The nearest resistance level is seen at 0.9076, which is 38.2% Fibs. It also corresponds with the 50 EMA as well as the downtrend trendline.

USDCHF hourly chart August 31st 2020

Only a daily break and close above 0.9076 resistance could result in a further uptrend, towards 0.9220 resistance. On the downside, only a daily break and close below 0.9000 will invalidate the bullish forecast and the long term downtrend can be expected to continue.

On the 15M timeframe, USD/CHF is forming a triangle pattern, with no breakouts either to the upside or the downside. This goes to show that price is still consolidating and for the uptrend to start, the pair must break above the 0.9045 resistance area. Prior to that, USD/CHF might still consolidate and even test 0.9000 psychological support.

USDCHF 15minute chart August 31 2020

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Muhammad Awais

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