By: Mike Kulej
After sinking to an all time low of 0.9299 at the end of December, the USD-CHF has been trying very hard to reverse. The market rallied to about 0.9785, pulled back and made another attempt, which stalled at 0.9775 late last week.
These multiple run-ups suggest that the buying pressure is on the increase. Since the price met a serious resistance at about the same level, the 0.9780 becomes a pivotal point for the most immediate action in USD-CHF. If this pair moves above the resistance, and closes there on the daily chart, chances are good that the rally will continue and a major bottom has completed.
Next Course of Action?
There is more evidence that the USD-CHF is attempting to reverse. Perhaps most important is the fact that during the latest pull back the price failed to make a new low. It is a bullish sign. More bullish hints are provided by the 100 SMA and the Ichimoku cloud (Kumo). Both of them are now below the price and have turned from a resistance into a support.
Among other indicators, the MACD crossed the zero line to the upside and the ADX is also moving north, suggesting the trend is strengthening. All that is positive for the USD-CHF, but the key is the 0.9780 resistance – it must be broken to confirm the new, bullish trend.