- USD/CHF is trapped between resistance and support on a monthly basis.
- Support is expected to be tested where the opportunities will arise.
Whether you are a bull or a bear, the following top-down analysis has something for everyone.
Currently, there is little to take advantage of without being exposed to swings.
The case for the downside is diluted by the monthly support while the upside opportunities would be best placed once there has been an actual test of the monthly support.
Monthly chart, break of support prospects
-637388227216662672.png)
If the support gives, then there is plenty of fuel in this correction that has made it to a 38.2% Fibonacci retracement level for the bears to stay in control and extend the downside towards lower structure.
However, if the support holds, then the upside will be back in the picture.
Strong support scenario
-637388230216126491.png)
Weekly chart
-637388231129661621.png)
In a scenario where there is strong support, bulls will seek entry and target the upside.
Daily chart
-637388231600037940.png)
The right-hand shoulder (RHS) of the head and shoulders is also an M-formation.
The neckline can be targeted.
4-hour chart
-637388232133053276.png)
Those seeking a test back to resistance would welcome a discount and there could be one in the making.
An extension fo the downside and subsequent test of the monthly support could well be in order at this juncture and offer a better entry point to target the M-formation's neckline.
The 4-hour chart can be monitored for bullish technical conditions once a test of the support has been made.
A break of the support will give rise to downside opportunities.
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