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USDCHF 20/02/2019

USDCHF – bearish engulfing can be a signal for continuation of declines

On the daily chart, when we look at it from the point of view of Technical Analysis, an interesting situation emerged. We have two Price Action formations contained in one another: the Inside Bar created by a candle from February 11 and the Bearish Engulfing contained therein, which was created by yesterday’s bearish daily candle. It is worth paying particular attention to the latter formation, because it was created right after the bearish pin bar and gives a fairly strong sell signal. Today at 8 p.m. we will get to know the minutes of the last meeting of the FED, when it was decided to leave interest rates unchanged, and from Powell’s rather cautious statement we could conclude that further rate increases are in question. If it turns out that the content of the protocols harmonizes with Powell’s dovish attitude, we can expect permanent overcoming of the lower edge of BE and further drops. Overcoming the upper BE limit will negate the downturn scenario.

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