The last six months were not successful for the American dollar. Since mid-March, the dollar has been systematically losing to the Swiss franc (USDCHF), losing more than 900p from this year’s maximum (0.9900) to the “bottom” on the last day of August 0.8995.
September started with a re-test of this year’s minimum and the price of the pair started to rise.
Currently, at the time of writing this analysis, today’s bullish candle, together with yesterday’s candle forms a formation of bullish engulfing.
In the diagram D1, the formation is marked with a red rectangle. The range of the pattern is 0.0996-0.9106. Between the price graph and the MACD there is an upward divergence.
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When you look at the H4 chart above, you will notice that throughout August, the price was moving in consolidation in the shape of a descending wedge. Usually when such a formation is formed at the bottom of a downward trend we can expect an upward correction.
The signal to start such a correction may be to overcome the resistance of the wedge, which will also be a breakout from mentioned engulfing pattern on the daily chart. This is also an upward divergence on the MACD on this h4 chart.
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