Risk of a countertrend squeeze in USD/CHF is building after it printed a bullish engulfing candle on Tuesday, breaking out of the falling wedge it had been trading in over recent weeks.
While the price signal alone is bullish, to get excited about the prospect of a meaningful squeeze higher, USD/CHF needs to clear minor resistance overhead at .8246. If it can get a foothold above this level, it would generate a setup where longs could be established with a stop beneath for protection. .8333 looms as a potential target—a known resistance level that also has the key 50-day moving average sitting just above it.
Momentum indicators remain bearish but are starting to turn higher, suggesting the bearish flows that pushed USD/CHF to multi-week lows on Monday may be starting to ebb.
Good luck!
DS
While the price signal alone is bullish, to get excited about the prospect of a meaningful squeeze higher, USD/CHF needs to clear minor resistance overhead at .8246. If it can get a foothold above this level, it would generate a setup where longs could be established with a stop beneath for protection. .8333 looms as a potential target—a known resistance level that also has the key 50-day moving average sitting just above it.
Momentum indicators remain bearish but are starting to turn higher, suggesting the bearish flows that pushed USD/CHF to multi-week lows on Monday may be starting to ebb.
Good luck!
DS
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