The American dollar to Swiss franc has spent the past several days moving sideways, locked inside a pennant formation marked with red lines. Volatility is steadily decreasing, and price action is compressing—often a precursor to a decisive breakout.
The pair is now approaching the apex of this pennant, which means traders should prepare for a larger movement in the coming sessions. A breakout to the upside would trigger a buy signal, with the first target set at the upper pink horizontal resistance around 0.8113.
Alternatively, a breakdown below the pennant’s lower boundary would activate a sell signal. In that case, the initial target would be the lower pink horizontal support, with the potential for an extended drop if that level fails.
The market is winding the spring tighter—soon we’ll see which way it snaps.