By: Mike Kulej
The Swiss Franc remains one of the safe havens among currencies. It just keeps getting stronger, especially against the US Dollar. The long term down trend continues and the price has set a new all time low at 0.8551 about 2 weeks ago.
That is where the daily chart formed a candlestick reversal pattern. It created a doji followed by a shaven top bullish candlestick, which produced a rally to 0.8946. At that point, the USD-CHF ran into a strong multiple resistances – from the trendline and a previous low. Such confluence often proves difficult to break, especially on a first try.
We can see that this was a repeat of a situation from early April, when an almost identical set of circumstances happened at around 0.9350. The difference this time is that the price is not falling as fast as before, but rather lingers just under the trendline, as if the downtrend is losing momentum.
For the trend to reverse, however, the price must climb above both the trendline and the 0.8945 resistance on closing basis. That should be confirmed by the ADX rising, too. Until that happens, the USD-CHF remains in a downtrend, even if it is seemingly getting less convincing.