After a sharp dive last week, the USDCHF is now moving within a descending channel as seen on the 1-hour chart. The pair seems to be aiming for the bottom of the channel and the psychological support at 1.0330, from which it could rebound from. If the pair breaks below this area, it could tumble all the way down. However, the stochastic is currently in the oversold region, which indicates that upward movement is due anytime soon. It could rise all the way to the top of the channel and find resistance at the psychologically significant 1.0400 or around the previous high of 1.0424.
It seems that a couple of bullish signals have popped up on the four-hour chart. For one, the pair convincingly broke through resistance at 0.8450. Remember, once price passes through resistance, that price level could become support as it becomes an area of interest. Secondly, there’s the bullish flag chart pattern that has formed. If the pair continues its move upwards, we might see some resistance at the top of the flag somewhere around 0.8660 and further on at 0.8800. On the other hand, if the pair heads does south, potential support could be found at 0.8550 and 0.8450.
Lastly, let’s take a look at the daily chart of the Kiwi! After bouncing off the longer term uptrend line, the NZDUSD has made a sharp upward move to start the month of September. Last Friday, the pair reached out and set a yearly high! However, the stochastics are already indicating an overbought condition. Given its steep upward move plus an overbought condition, it could move sideways for awhile between 0.7100 and 0.7000 before making its next move up top. There is still an upward bias, though, since the long term uptrend remains unbroken. If the pair breaks past .7100, it could try to test the .7200 price barrier. On the flip side, it may fall down to 0.6900 if it closes below 0.7000.