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While I’m still watching my open GBP/USD trade I noticed that USD/CHF is about to bounce or break from a triangle resistance. Which direction do you think the dollar will go?

As you can see, USD/CHF is trading just under the .9850 area, which has been an area of interest for the pair for YEARS. This time, though, it represents an ascending triangle resistance on the 1-hour time frame. Oh, and it’s also around the top weekly ATR and last week’s highs!

And if those are not enough to get your attention, you should also see that a loose bearish divergence has formed on the chart.

USD/CHF 1-hour Forex Chart
USD/CHF 1-hour Forex Chart

Fundamentally the dollar has a few things going for it. The U.S. Senate passing an important budget measure tops the list, as it means one less hurdle for the Republicans to pass a Trump-approved tax reform.

And then there’s John Taylor maintaining his momentum as the Fed’s next Governor. Though not in the initial list of top contenders, the presumably hawkish bet is now one of the more popular names being buzzed by the market bees.

In fact, according to closely-watched predictit.org, Taylor just edged out Kevin Warsh for second place after Fed Board of Governor member Jerome Powell.

Last but not the least is a lack of escalating tension between Trump and Kim Jong Un. No news is good news, it seems, as traders are able to focus on record-breaking asset prices instead of worrying about a nuclear war.

But are these enough to push USD/CHF into an upside breakout? A break above the .9850 area could lead to a retest of .9950 or even parity levels. If the pair ends up bouncing from the area of interest, though, then we can consider trading the rising trend line support instead.

What do you think? Will the dollar pop higher or will dollar bulls call it a day and let the bears take over?

See also:
My Q4 2016 Forex Trade Review and Reflections
HLHB System’s 2016 Performance Summary

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This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.