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. 

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