Is the Greenback in for more losses?
Check out this reversal formation I’m watching on the 4-hour chart of USD/CHF.
The pair is close to completing a head and shoulders pattern, as price is closing in on the neckline support at the .8900 major psychological mark.
USD/CHF: 4-hour
USD/CHF 4-hour Forex Chart by TV
Just how low can USD/CHF go if it breaks below the neckline?
Well, the chart pattern spans approximately 250 pips, so we might just see a selloff that’s the same height!Technical indicators are still reflecting the presence of bullish vibes, though. In other words, there’s a chance support might hold.
For one, Stochastic is already dipping in the oversold region to reflect exhaustion among sellers. Turning higher would mean that buyers are ready to take over, possibly lifting the pair back up to the area of interest at the .9000 mark.
The 100 SMA is also above the 200 SMA to hint that support is more likely to hold than to break. Then again, the gap between the moving averages is narrowing to suggest that a bearish crossover might happen soon.
The SNB decision might be worth watching when trading this one, as another decisive tightening move from the Swiss central bank could put it on more hawkish footing compared to the Fed.
On the other hand, hints that they could pause their rate hikes soon might mean a sharp selloff for the franc.