USDCH Fake it till you make it
06 June 2023
The Asian session finished with a weaker USD. The European session, on the contrary, started with the strengthening of the American currency. Such moves might not have a huge meaning for most of the pairs, but for our hero of today, they play an essential role, as the pair is currently in a very important place on the chart.
The USDCHF is fighting on a key resistance at 0.907, a crucial one since the end of 2021. In layman’s terms, the price trading above is bullish and below the line is bearish. In addition, we are currently on the lower line of a flag pattern (black) which is an ultimate support of the bullish correction started in May. The price breaking the line is a sell and the price bouncing off the line is a buy.
The situation as of the moment - in the middle of the European session - is as follows: The breakout of the lower line of the flag from the early morning seems fake, as the price has reversed sharply and is currently trying to break the 0.907 and come back above it. False breakouts are usually strong trading signals and should not be neglected. Should Tuesday finish inside of the flag, we will have a confirmation of a false breakout and, in consequence, a buy signal. Let’s see what the rest of the day brings.