The USD/CHF has seen a correction in recent days, sparking speculation about a potential reversal in trend. While the pair has not dropped significantly enough to confirm a reversal, the possibility of a continued uptrend remains.
After hitting a new low on August 5, the USD/CHF began an upward trend, marked by higher highs and lows on the 4-hour chart. However, the pair has since started to correct back, reaching a new low of 0.8616 on August 19.
While bearish signs are evident, the overall outlook is still slightly bullish with some risks involved. The pair has broken below key indicators such as trendlines and moving averages, indicating a bearish sentiment. A close below the 0.8618 support level could confirm a reversal in trend, potentially leading to a downtrend towards 0.8560.
On the other hand, a recovery is still possible as the correction could be part of an ABC pattern within the uptrend. A bullish reversal candlestick pattern or a close above the 100 SMA at 0.8688 could signal a resumption of the uptrend, with a target towards the August 15 high at 0.8749.
USD/CHF 4-hour Chart
In conclusion, while the USD/CHF is currently in a correction phase, the overall trend direction is still uncertain. Traders should watch for key levels such as the 0.8618 support and the 0.8688 resistance for potential signals of a trend reversal or continuation.