Can’t get out of bounds!. Today we will be looking at the #USDCHF… | by Paul Mihalev | Coinmonks | May, 2023


Paul Mihalev

Today we will be looking at the #USDCHF pair. First, the monthly chart. As we can see this time, after approaching the bottom of the range that the pair has been in for almost 12 years, the price fell to 0.88194 in May of this year, then turned around and began to rise. It is now trading just above 0.9122 and it is possible that this upward movement will not end and the pair will have to rise to the upper limit of the range at around 1.03. However, such a possibility cannot be ruled out either — after the bounce, the pair will begin to fall with new strength, and this time it will be able to go lower. The monthly chart does not provide much information about the direction of the pair.

Turning to the daily chart, perhaps we can find a clue to the pair’s fate. We can see that the pair has come close to the 100 day moving average, last time in February 2021 a similar situation was resolved by a four day pullback and then a strong rise of almost 6000 pips. What will happen this time is unknown. I have tried to show the possible options on the chart, but we cannot guess which of them will be implemented in reality, we can only see after the events have already taken place. Sometimes, after passing the 100-day moving average, the price reaches the 200-day moving average almost seamlessly. Sometimes this move ends in a strong pullback, and only then does a real uptrend begin that can take the pair somewhere near the upper boundary of the range. This pair is quite difficult to trade as the Swiss central bank closely monitors and regulates the value of the Swiss currency.

Finally, let’s look at the hourly chart and see if there is any chance that the current movement will cross the 100 day moving average. As we can see, with the opening of the North American trading session, the pair has spiked up and crossed the moving average, and such sharp movements usually end in a reaction, a reversal, especially as the month ends today and many traders may try to close out their buying positions today. This, of course, will cause a reversal that may continue tomorrow when sellers find the situation favourable to open their trades. We just have to wait and see.

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