USD/CHF’s upswing from the previous week has taken the pair to a key technical resistance level this week.

Can the bulls maintain their momentum?

Or is USD/CHF able to extend a longer-term trend?

USD/CHF 4-hour Forex Chart by TradingView

As you possibly can see, USD/CHF has been making lower highs and lower lows because the start of May when the pair hit resistance on the .9200 psychological area.

The downtrend took the pair to its .8840 lows last week, however the Swiss National Bank’s (SNB) surprise rate of interest cut encouraged some CHF selling. It also didn’t hurt USD bulls when a round or risk aversion hit the markets and upped the demand for the U.S. dollar.

Do not forget that directional biases and volatility conditions in market price are typically driven by fundamentals. For those who haven’t yet done your fundie homework on the U.S. dollar and the Swiss franc, then it’s time to examine out the economic calendar and stay updated on every day fundamental news!

USD/CHF is now trading just above the .8950 psychological level, which isn’t too removed from the R1 (.8982) Pivot Point line, the 4-hour chart’s 200 SMA, and the highest of a descending channel that’s been around because the downtrend began.

Are we taking a look at a pullback opportunity for USD/CHF bears?

A few bearish candlesticks or consistent trading below the R1 Pivot Point line opens the opportunity of a downswing that will take USD/CHF back to the .8900 psychological handle. And, if there’s technical and fundamental momentum behind it, USD/CHF may even drop to its .8840 lows before extending its downtrend!

But when the pro-USD, anti-CHF persists in the following few days, then USD/CHF may extend its upswing as an alternative.

Look out for bullish candlesticks or sustained trading above the descending channel and R1 Pivot Point areas as they could lead on to an upside breakout for USD/CHF.

What do you think that? Which way will USD/CHF trade in the following few days?