The USDCHF currency pair, on the D1 timeframe, was in a down trend until 6 January when a last lower bottom was recorded at 0.87577. From then on, Bulls started appearing in the arena and demand began overcoming supply. After the lower bottom at 0.87577, the price pushed upwards through both the 15 and 34 Simple Moving Averages and the Momentum Oscillator crossed the zero baseline into positive territory.
A higher top and critical resistance level formed on 18 January at 0.89259. Subsequently, the Bears tried to gain the upper hand but they failed and a higher bottom forming on 22 January at 0.88386. A Morning Star Candle Pattern that formed during the higher bottom further confirmed that the Bulls might try to take back control of the price.
On 1 February, the Bulls proved themselves capable and the USDCHF broke through the critical resistance level at 0.89259 with a buy signal being triggered. Three possible price targets can be calculated from there. Applying the Fibonacci tool to the top of the resistance level at 0.89259 and dragging it to the bottom of the possible support area at 0.88386, the following targets may be considered. The first target can be projected at 0.89799 (161 %). The second price target may be likely at 0.90672 (261.8%) and the third target may be expected at 0.92084 (423.6%).
If the support area at 0.88386 is broken, the bullish scenario above is invalidated and will need to be reassessed. As long as traders in the USDCHF market maintain a bullish sentiment and demand overwhelms supply, the outlook for the currency pair on the Daily timeframe will remain bullish.
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