USD/CHF posted a small bullish “hammer” yesterday from the range lows at 0.8930/25. However only a move above 0.9049/55 would complete a base, as analysts at Credit Suisse note.
Key support at 0.8930/2
“USD/CHF fell to the bottom of the range at 0.8930/25 yesterday, before reversing higher to post a small bullish ‘hammer’, with a growing RSI divergence and daily MACD cross still in place. We therefore stay biased towards a move higher, with first resistance at 0.9012, then 0.9048/55, above which confirm a base and open up a move back to the 200-day average at 0.9072, then 0.9098.”
“The 0.9072, then 0.9098 levels need to cap to keep the broader, medium term risks lower in our view, however it’s worth noting that the potential ‘measured base objective’ projects a move well beyond here.”
“Our broader bias stays lower whilst below 0.9072/98 and our base case is still that the market will find a cap here and turn back lower. In contrast, a closing break below 0.8930/10, which is the 78.6% retracement of the Q1 recovery and May/June lows, would trigger a direct resumption of the core bear trend, with the next level 0.8870.”
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