Earlier today, the greenback declined to the lowest level against the Swiss franc since mid-September 2017, which resulted in a small drop under the long-term support line. Is this a sign of a bigger move to the downside or just a trap?
The first thing that catches the eye on the daily chart is a tiny breakout above the upper border of the blue consolidation and a fresh 2018 high. Although the size of the move is not impressive at the moment of writing these words, please note that the Stochastic Oscillator generated a buy signal, which suggests further improvement and a climb to at least 1.2405, where the size of the upswing will correspond to the height of the blue consolidation.
What could happen if currency bulls manage to push the exchange rate above this area?
Let’s take a closer look at the USD Index below.