CHF – Head and Shoulders Pattern Neckline Broken, USD/CHF Continues to Decline

The USD/CHF pair broke below the 50-day moving average last week, reaching the 0.80 level, suggesting continued downward pressure on the dollar in the short term. Furthermore, a head and shoulders pattern appears to have formed on the chart, with the neckline at 0.8030. Failure to return above this level could lead to further downward movement within this pattern. Based on a 120-pip range for the left shoulder, the potential target is 0.7910, while the head is at 0.7855. Further significant support is expected at the 0.78 to 0.7760 levels. Resistance will be seen at 0.8030 and the 50-day moving average at 0.8085, with the next levels at 0.8150 and 0.82.

Forecasted range:
Resistance: 0.8030 – 0.8085 – 0.8150 – 0.8200*
Support: 0.7910 – 0.7855 – 0.7800 – 0.7760

Key Focus:
Wednesday
Swiss ZEW August Economic Expectations Index (16:00)

Friday
Swiss KOF July Leading Indicator (15:00)

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