USD/CHF has been held by a short-term downwards moving trendline since the 10th of May, but for the last couple of weeks the pair managed to flatten itself out and currently is showing us some sideways activity. The bulls continue to fight back against the bears and thus, we will remain neutral and wait for a break out through one of the key levels discussed below.
During the early European morning, the pair emerged above the 0.9870 line and a good move higher, towards the first good area of resistance at 0.9895 level, could bring back some hope for the bulls. A move above that level could open the path to the 0.9910 area or could even lead to a test of the aforementioned trendline. If the bulls remain in the driver’s seat, then a break of that trendline could become a reality. This could be seen as a positive development and more bulls could start joining in the action.
On the other hand, a strong move below the 0.9870 mark could open the doors for a test of the 0.9830 level, a break of which could be seen as a real feast for the bears. If the last-mentioned level is not able to withhold the downside pressure, then we could start targeting the next potential strong area of support at 0.9790, marked near the lowest point of last week.
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