The USD/CHF continues to press against resistance at .9750 and a currently developing price action pattern suggests that a breakout may be imminent. Each pullback off .9750 resistance has been shallower than the previous one, creating a clear Ascending Triangle formation over the past week. Generally, these patterns resolve with a breakout above resistance and can lead to a strong continuation in the same direction. While there is the danger of Fed President Bernanke’s speech complicating matters today, more aggressive traders may still want to prepare for a bullish breakout.
Specifically, traders could set a stop buy order at .9762 (above this week’s highs) with a stop loss at .9680 (back under the bullish support line and overnight lows) and a target at .9875 (ahead of the 150-pip projection of the breakout).
This trade would be invalidated by a drop below .9680 prior to entry.