The USD/CHF recently broke below a 500 pip consolidation area that went from 0.98 to 0.93 on its outer edges. By breaking down below the lowest level, it showed that it wanted to fall again and possibly as far as the 0.88 handle. Since then, it has consolidated around the 0.93 mark, and is showing that it still is trying to decide what to do.
Because of this, there is now a case being made that a bear flag is forming in this area, which would measure 500 pips. Odd, considering that would give us the exact same target as the original break down. However, until we actually close below 0.92, we can’t be sure of it. Any close above the pictured top of the flag, and we could bounce for a few hundred pips here. Favored positions will be a sell on a break below the 0.92 mark.
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