In today's technical analysis, USD/CHF presents a strong bearish setup, with price action continuing its downtrend by forming lower lows and lower highs over the mid-term. This sustained declining structure highlights a clear negative sentiment in the market.
Recently, the pair formed a bullish flag pattern, marked by green trendlines, representing a temporary correction within the broader downtrend. However, yesterday’s decisive breakdown below the flag pattern confirmed a fresh wave of selling pressure. This flag breakdown suggests that sellers have regained control, potentially initiating a new bearish leg.
As we approach the European trading session, a small corrective upswing is unfolding, creating an opportunity for sellers to enter at slightly better prices. The bearish outlook remains intact as long as the price stays below the first orange horizontal resistance level on 0.8855.
However, if USD/CHF manages to break above the orange resistance or reclaims the high of the flag pattern, the bearish formation will be invalidated, signaling a potential shift toward bullish momentum. Until then, the dominant trend remains negative, with further declines likely.