NZD/CHF broke above the triangle pattern, which might result in a strong rally.

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Updated: 22 May 2020

Hello traders! Looking at the NZD/CHF currency pair, there is a clear tendency for an uptrend. Price broke above the downtrend trendline followed by the breakout of the 200 Simple Moving Averages. Then price consolidated and formed a triangle pattern. After price bounced off the uptrend trendline, the triangle support, the price went up, broke the downtrend trendline, and tested 0.5952 high.

During the past 48 hours, the price has been consolidating between 0.5950 resistance and 0.5920 support, potentially providing a buying opportunity. Perhaps early next week the uptrend could be started but as long as the 0.5896 support holds. This support is confirmed by 23.6% Fibonacci retracement level applied to the first wave up. It is clear that the price has rejected this level and produced a new higher high.

Overall, the trend remains bullish, at least in the short term. There are several upside targets based on Fibs, but the most important one is near 0.6120 at 461.8% retracement levels. This is because such move would mirror the initial wave up, and it seems logical that price can reach this level.

Nevertheless, other resistance levels must be watched for rejection, because this might end the uptrend. Speaking about the downtrend, only 1H break and close below 0.5890 would invalidate a bullish scenario.

Bias: Strongly bullish while above 0.5890

Potential Support Zone: 0.5900 – 0.5925

Potential Targets: 0.5970, 0.6020, 0.6070, 0.6120

Have a profitable trading!