USD/CHF Price Analysis: Bulls waiting to charge in a daily continuation from key support
|- USD/CHF has stalled the monthly decline in demand territory.
- Bulls will be looking for a sizeable correction and opportunity on the lower time frames.
The Swiss franc's net positioning has been reduced from an institutional perspective over the last couple of weeks with both longs and short positioning being trimmed.
However, the US dollar has been correcting also which has tipped the balance in favour of the upside.
The following is a top-down analysis where a bullish bias has been derived overall.
Monthly chart
Bulls stepping in on the monthly chart at a demand area opens opportunity ton the lower time frames to target prior structure, aka, new resistance.
At least a 38.2% Fibonacci retracement would be expected which has a confluence with the prior lows, aka, new resistance.
Weekly chart
The weekly chart shows a bullish doji and overhead resistance.
There is also the current candlestick's wick that would be expected to be filled in. This represents a pull-back on the daily chart and prospects of a bullish continuation.
Daily chart
Following the doji and the bullish engulfing candlestick, the price rallied.
It has since corrected to the W-formation's neckline and for a 38.2% Fibonacci retracement of the bullish impulse.
An upside continuation would be expected from this area of support.
4-hour chart
As illustrated, a probable scenario from here would be for the creation of a W-formation on the 4-hour chart.
The potential bullish impulse, completing the W-formation, would be expected to retrace at least to a 38.2% Fibonacci level.
There is the confluence with the neckline of the W-formation at that area also.
An upside extension would then be probable towards the weekly resistance area and thus completing a bullish daily extension.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.