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USDCHF: Reversal or Trend Continuation?

We always start our analysis by looking at the H4 charts.

H4 chart on USDCHF 3 Apr 2014

H4 chart on USDCHF 3 Apr 2014

  • Previous trend is down
  • There is no change to the down trend yet however from the recent boxes we can see price is more up.
  • Price is currently at a resistance, price needs to clear this resistances if it were to head higher.

Where did this two resistances come from?

Let’s look at the Big Picture on a higher time frame.

Resistance on Weekly Chart of USDCHF

Resistance on Weekly Chart of USDCHF

  • On the Weekly charts, we see recent turning points at previous support levels. This in-turn becoming possible resistances now that price is below.
  • Putting in the boxes, we also see that if price can clear the higher of the 2 resistances, it would have effectively done a WR of 2 years low.

So, what now?

When the charts do not offer a direction, do not over predict. Instead wait for the market to let you know. However this doesn’t mean we cannot prepare for either possibilities.

Possibility #1: Price continues down (H4T)

Charting a trend continuation on H4 of USDCHF

Charting a trend continuation on H4 of USDCHF

  • Price needs to remain below the resistance levels over head.
  • For price to move lower, it has to close convincingly below the lowest of the H4 boxes high.

Possibility #2: Price turns up (H4R)

USDCHF charts possible reversal pattern on the D1 charts

USDCHF charts possible reversal pattern on the D1 charts

  • On the D1 charts, we can see a small IHS already formed and also a possibility of a large one.
  • Ultimately price needs to clear the current resistance for it to have any chance to head higher up.
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2 thoughts on “USDCHF: Reversal or Trend Continuation?”

  1. Kangwei Goh says:

    Hi Jerome,

    So if this week H4 box close above the Resistance zone the H4R is confirmed and we look for 1234 in the H1 boxes for entry?

    1. Jerome Lee says:


      Hi Kangwei,

      Yes, though i would prefer to see a bullish expansion by the end of today as it would give a clearer direction.

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