The USD/CHF is seen in the 4H chart in sideways action, trading upwards since finding support at 0.9088. Before this, consolidation range, which has resistance at 0.9262, the market has been bearish, falling from 0.9593. (Before that, the market has been bullish from 0.7065). The market is thus now, threatening to break into corrective rally against the prior bear run, but also possibly breaking into bullish continuation of the larger scale bull run.
The bullish target above 0.9262, taking the width of the range projected into the direction the breakout, would target somewhere near 61.8% retracement, around 0.94. Indeed 0.94 is an important pivot, holding consolidation support in January until it broke and opened up the bear run down to 0.9188.
Some clues of failure would be the RSI not reaching 70, and price unable to break above the 200 simple moving average in the 4H chart, leading to a break back below 0.92. This type of rejection would suggest weak bullish attempt, and a bearish one to retest 0.9088 as well as a pivot at 0.9055. A break below 0.9050 would target the 200 day moving average near 0.8770.
Fan Yang CMT is a forex trader, analyst, educator and main contributor for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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