The Potential Upside of USD/CHF in a Sideways Market
- Analysis of Market Trends: USD/CHF appears to be on the verge of a new upward movement within its established sideways range.
- MACD Indicator Insight: The MACD indicator is showing signs of a potential bullish momentum shift, with the possibility of bulls entering the market if it crosses its signal line.
Examining USD/CHF on the 4-hour Chart
When looking at the Moving Average Convergence Divergence (MACD) indicator on the 4-hour chart for USD/CHF, we can see that it is currently below the zero line but starting to show signs of turning. If the blue MACD line crosses above the red signal line, it could indicate a stronger signal for a potential uptrend within the range-bound market. In sideways markets, the MACD tends to be a more reliable indicator compared to strongly trending markets.
If the MACD crossover occurs and the price continues to rise, the next potential target for USD/CHF could be around 0.8517, which corresponds to the highs seen on September 23 and 26. This could be followed by a move towards the top of the range at 0.8539.
However, it is important to consider the possibility of a breakout from the range. Given the previous bearish trend leading up to the consolidation, a downside breakout is slightly favored. A close below 0.8375, which was the low on September 6, would indicate a potential downside break. A decisive breakout would likely be confirmed by a longer-than-average red candlestick closing near its low or three consecutive bearish candles breaking below the level. In such a scenario, the expected target could be as low as 0.8318, which is the 61.8% Fibonacci extrapolation of the range height projected downwards.
Overall, while the potential for an upward movement in USD/CHF within the range is promising, traders should also be mindful of the possibility of a breakout and consider both bullish and bearish scenarios in their trading strategies.