USD/CHF May Reverse Downtrend if Falling Wedge Plays Out

USD/CHF has been in a near-term downtrend since the beginning of April, fundamentally initiated by a decline in US longer-term Treasury yields amid a dovish Federal Reserve.

Prices have since been consolidating lower within the boundary of a bullish Falling Wedge chart pattern. A breakout to the upside could open the door to resuming the uptrend from January through March. Especially if US yields resume outpacing their Swiss counterparts.

Otherwise, prices may continue aiming lower within the wedge. If there is a breakout, finding confirmation is key. This may include a daily close above the chart pattern with follow-through.

With that in mind, the current approach seems neutral.