News & Analysis

USDCHF pair retraces as price level indicates a potential entry opportunity

19 October 2022 By Adam Kahlberg


The USD had a pullback in recent days as equities have rebounded allowing for other strong currencies such as the CHF to see


From a technical perspective the chart shows some interesting price action that may indicates an important inflection point for the price. On the weekly chart, the price has been in a long-term range between 0.87 CHF and 1.03 CHF. With the USD being so strong over the last year, the price has been consolidating towards the top of the range. The weekly chart also shows an important pattern forming which is a golden cross. This is when the shorter, (50 week Moving average) crosses over the longer (200 week moving average) which is usually a signal of the Bears taking control. However, looking at past price history this golden cross has not been a particularly accurate indication of a strong rise in price. Rather it indicates just how choppy the price action is.


On the shorter, daily time frame, the price has had a significant sell off to begin this week. Twice, the price has failed to break out of this range, and therefore the price may fall back down to the bottom of the range or at least test the support at 0.98326. If the price can drop lower, it may fall right to the bottom of the range. On the other hand, both prior sell offs involved aggressive red sell candles. In this case there has only been one so far. Therefore, waiting for the next sell candle may provide a good entry signal to go short. Alternatively, if the price can base and consolidate it may indicate that a breakout to the outside is about to occur. With economic data related to inflation still to come, the USD may till rise again supporting a potential break.


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