The FX Trader’s view –
An earlier downmove in USD/CHF effectively came to a halt at the start of June, a choppy consolidation then ensuing. Bulls have so far failed to take the initiative but, for now, shorter term downside may well be limited…
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WEEKLY CHART: The breach of the medium term bear channel top projection was a hint that long term bears were losing momentum, despite the subsequent deep pullback.
This was supported above the 76.4% retracement – it is unclear now if latest weakness will extend this far. -
DAILY CHART:
Choppy action has been a clear feature here recently – a type of final ‘downleg’ in process perhaps.
The bear channel top has been very effective resistance, but a small break of this could prove deceptive, so we keep in mind the higher 1.0934 30-Jul high too and a further channel top projection around 1.1000 (with 1.1020 24-Jun high just above) – all this must be cleared to break free of the consolidation/bear phase and confirm a bull phase underway.
Meanwhile, on the downside, we currently have two Fibo projections at 1.0435/10, above the 76.4% level on the Weekly chart, and await with interest the reaction here, if tested.
In the FX Trading Guide we have maintained a bearish stance recently, but acknowledging that downside could be restricted.
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