NZD/CHF could see breakoutFollowing a six-week depreciation against the Swiss Franc, the Kiwi managed to reverse early on September and recover half of the losses. This upward movement revealed the existence of a junior channel up. This pattern, however, is a part of a longer-period descending channel in force since mid-July.
The pair is gradually approaching the upper boundary of the senior pattern which is located near the 61.8% Fibonacci retracement and the weekly R2 circa 0.7120. It is likely that this area is reached on Monday. Given that ascending wedge is generally a bearish formation, the Kiwi should break out to the upside, possibly using the aforementioned 0.7120 area as a reversal point. Subsequently, the downside target could be the 200-hour SMA and the 38.2% Fibo near 0.7020 a breakout of which should pave the way for a further decline.
If nothing changes in the direction of the pair, it might test the lower boundary of the senior channel in the medium term.
