USDCHF looks poised for more upside, as the pair is breaking above an area of interest and neckline of a reversal pattern on its daily time frame. Stochastic is still moving up, indicating buying momentum.
As you can see, price appears to have formed a complex head and shoulders pattern on its daily chart, indicating that the previous downtrend is already over and that a reversal will take place. A strong break past the .9150 mark could take the pair up by as much as 450 pips, which is the same height as the chart pattern.
Going long at the .9150 level with a stop below the .9000 major psychological level and a target of 450 pips or at .9600 could yield a 3:1 return on risk.
Bear in mind that the latest FOMC meeting minutes turned out bullish for the dollar, as policymakers started discussing tightening monetary policy sooner than anticipated. Meanwhile, growth in Europe has been weak and could continue to weigh on the Swiss franc.
By Kate Curtis from Trader’s Way