USD/CHF has shown signs of a potential short-term uptrend, with various indicators pointing towards a bullish reversal. The recent rise in the pair is attributed to positive US Purchasing Manager Index (PMI) data, which indicated growth in the manufacturing and services sectors in June. This has brought into question the previous downtrend that USD/CHF had been following since breaking out of a rising channel earlier in the year.
On the 4-hour chart, Thursday’s rally from the 0.8827 lows was strong and pointed towards a possible reversal. The Relative Strength Index (RSI) also confirmed this by exiting oversold territory and showing strong upside momentum. The pair has broken above the last lower high from the previous downtrend, the 50 Simple Moving Average (SMA), and a green downtrend line, providing further evidence for a potential uptrend.
It can be argued that USD/CHF is now in a very early stage of a short-term uptrend, which is supported by the recent price action. However, a stronger confirmation would be a break above the major resistance level at 0.8989. This level is crucial in determining whether the pair will continue its upward movement and establish a new bullish trend.
In conclusion, USD/CHF is showing signs of a potential short-term uptrend, with indicators suggesting a bullish reversal. The positive US economic data has contributed to the recent price appreciation, raising doubts about the previous downtrend. Further confirmation of an uptrend would be a break above the key resistance level at 0.8989. Traders will be closely monitoring the price action of USD/CHF in the coming days to confirm the start of a new bullish trend.
