USD/CHF Price Prediction: A textbook uptrend is unfolding

• USD/CHF is trending upwards in the short and medium term.
• It is likely that the uptrend will continue towards bullish targets.

USD/CHF is showing a textbook uptrend with alternating rising highs and lows on the 4-hour chart.

The pair is likely to be in an uptrend in both the short and medium term and given the technical analysis principle that “the trend is your friend”, the chances are for an upward continuation.

USD/CHF 4-hour chart

USD/CHF is likely to reach the target generated after breaking out of its September range at 0.8680, the 100% Fibonacci (Fib) extrapolation of the height of the higher range. A break above this level could lead to a further extension towards the resistance level at 0.8750 (August 15 high).

USD/CHF has already reached the conservative range breakout target at 0.8627, the 61.8% Fib level. This could mean that the upward pressure could be easing.

The Relative Strength Index (RSI) momentum indicator shows a bearish divergence with price when comparing the lows of October 16 and 17 (red dotted lines on the chart). Although the price made a higher low on October 17 compared to the previous day, the RSI made a lower low. This could indicate slight underlying weakness, but does not alone indicate a trend reversal.

A chart gap opened on Monday morning and there is a risk that the market could pull back completely to close the gap. If so, it could correct to 0.8574. To confirm a likely trend reversal, a break below previous range highs at 0.8541 would be required.

The longer-term trend of USD/CHF is likely to still be bearish despite the strong recovery in recent weeks.