Hello traders! Let’s observe the USD/CHF currency pair. In my previous analysis, I suggested a potential corrective move to the upside and posted a trade idea on our Facebook. You can find this post right here: https://www.facebook.com/groups/fxtradingdiscussion/permalink/713661239169022/
But to summarise, above is the screenshot of the idea
The expected correction to the upside seems to have ended and now, the long term downtrend can continue.
Below, on the Daily chart, we can see that the downtrend trendline has been rejected cleanly, suggesting the continuation of the downtrend. But at the same time, there is strong support, which is seen near 0.9600 psychological level. This level is confirmed by two Fibonacci retracement levels, first is 61.8% Fibs, applied to the last strong wave down. Second is 261.8% Fibs, applied to the first corrective wave up, after the breakout of 200 Exponential Moving Average.
On the 4 hour chart, we can see that previously this area has acted as the support already, and this is the reason we can expect it to be a demand zone once again.
In order to confirm the long term downtrend continuation, the price must break and close below 0.9590 on a Daily chart. Only then we can speak more about the downtrend. For now, the price could initiate a wide range- trading, result of which might be the decline towards 0.9600.
Bias: Bearish while below 0.9900 psychological level.
Potential Resistance Zone: 0.9850-0.9900
Potential Targets: 0.9595
Have a profitable trading!