USD/CHF has developed a potential reversal pattern, the confirmation will come from the USDX if the index validates its double bottom pattern as well. The pair remains under selling pressure, some poor US data later could invalidate the reversal pattern and could announce a larger decline.

The pair is trapped within a down channel, so a USDX's drop could push USD/CHF towards fresh new lows. The dollar needs support from the US economy today to be able to start a leg higher.

USD/CHF failed to stabilize below the downside line of the descending channel and now is almost to reach the Pivot Point (0.9139) level. The potential double bottom pattern will be confirmed after a valid breakout, jump, above the 0.9223 level.

So, it is premature to talk about a significant increase as long as the rate is traded way below this level. USD/CHF is trapped between the S1 (0.9048) and R1 (0.9223) levels, so a valid breakout from this range will bring a trading opportunity.

• USD/CHF Trading Tips

Sell a drop and close below the S1 (0.9048) level, the next downside target could be at the 0.8965 level.

Buy a valid breakout above the R1 (0.9223) level, this scenario will validate a rally towards the 0.9376 level.