The beginning of last week wasn’t very kind to the dollar. During Monday and Tuesday’s sessions there was a strong sell-off on USDCHF, after which the price started to consolidate on support, where two price action formations were created. What do these setups indicate?
The dollar slippage to the franc led its quotes to channel support around 0.9865. There, as you can see in the daily chart below, it formed an inside bar on Thursday, because the quotes of that day were in the range of trading on Wednesday.
On Friday, the bullish outside bar was formed, which also provided a breakout from the mentioned inside bar. The price action of this type on support indicates the potential for growth. In the case of the USDCHF, the key remains the upper limit of the channel and the horizontal level of 1.0022 (November peak).
Alternatively, the opening for further falls will take place when the support zone is defeated in the range of 0.9850. The next key level of defense will then be found in the vicinity of 0.98 CHF.
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