The currency pair rallied and erased the yesterday’s losses as the USDX has rallied as well. USD/CHF reached fresh new highs today and seems determined to resume the upside movement, but is premature to say what will really happen because is still trapped below an important dynamic resistance.

The USD has taken the lead again after the yesterday’s drop and seems strong enough to drive the rate much higher. Technically, it should climb much higher after the valid breakout from a descending pitchfork’s body, but only if the USDX will have enough directional energy to take out the 93.81 horizontal resistance.

The USD received a helping hand from the US Existing Home Sales, which has increased from 5.35M to 5.39M in the previous month beating the 5.30M estimate. The Federal Budget Balance is expected to be released as well, the indicator could increase from -107.7B to -0.9B.

I’ve added the USDX’s chart to show you better what’s happening with the USD on the short term. USDX edges higher and is almost to hit the 93.81 static resistance where he may find resistance again. Now is retesting the sliding line (sl) of the ascending pitchfork. As you already know, only a valid breakout above the 93.81 static resistance will confirm a broader rebound and a USD dominance.

The USD/CHF rallied and jumped above the 0.9835 previous high and is almost to reach the outside sliding line (sl) of the minor blue ascending pitchfork.It seems like we finally have a valid breakout from the descending pitchfork’s body. The failure to reach to drop towards the median line (ml) of the ascending pitchfork signals that we may have a breakout above the sliding line (sl).

We have an important upside target at the first warning line (WL1) of the descending pitchfork, it could be attracted by this line after the retest of the sliding line. A buying opportunity may occur only if the rate will come to retest the upper median line (uml) or after a valid breakout above the sliding line (sl).