After breaking above the falling trend line on its 1-hour and 4-hour time frames, USD/CHF has made another signal that a reversal could take place.
On its 4-hour time frame, the pair has made an inverse head and shoulders pattern, indicating that the previous downtrend is about to turn. If the pair makes an upside breakout above the neckline around the .9400 major psychological level, an uptrend could be confirmed.
However, stochastic is in the overbought region, suggesting a potential selloff. The oscillator hasn’t crossed down though, which means that dollar bulls are in control for now.
By Kate Curtis from Trader’s Way