How Will the Double Hammer Impact the USDCHF Pair's Future?
02 October 2023
Today's focus for traders and investors alike is on the currency pair: American dollar to Swiss franc. This pair has been displaying some intriguing bullish tendencies recently, captivating the attention of many in the trading community. August and September were notable months for this forex pair, with the price exhibiting a strong upward momentum. One of the significant events during this period was the breach above the pivotal 0.91 resistance level (green).
However, as is the nature of the markets, after such an upward stride, there was a pullback. This correction wasn't directionless, though. The price retraced back to the now broken resistance of 0.91, treating it as a newfound support. This phenomenon, a classic example of "old resistance turning into new support," can be witnessed vividly on the chart. The testing phase of this support level is demarcated with a blue hue, showcasing two consecutive hammers. These hammers, characterized by their tiny body at the top and extended lower wicks, are generally perceived as bullish reversal candles in the technical analysis realm.
Given the current structure, the overarching sentiment for the American dollar to Swiss franc pair leans heavily towards the bullish side. The presence of those hammer candles right above the green zone reinforces the positive bias. However, markets are always about possibilities. If the price decides to take a downturn and breaches below the green support zone, it would shift the narrative, ushering in a bearish sentiment. But, with the current technical setup, such a scenario appears to be on the backburner