Forex Technical Update

Previous: USD/CHF Trading Up Near Consolidation Resistance of 0.9262 (2.17)



After breaking above 0.9262 resistance, USD/CHF failed to extend beyond 0.93. From 0.93, the market slid to 0.9082, just below the previous consolidation support of 0.9088. Here we are seeing a bullish divergence. And even though the second low dipped lower, the 2 attempts can be seen as a double bottom. A break above 0.9150 completes the bottoming pattern.

Range-bound Outlook: A break above 0.92 shelves the bearish continuation scenario, and suggests a return to a sideways market. During the 2/21 US trading session, if the market breaks above 0.9150 and 0.9165 (38.2% retracement and 200 hour simple moving average), and then on a subsequent throwback stay above 0.9110, the bottoming process would still be valid, first opening up 0.92, and then opening up attack toward 0.9250-0.93 area again.

Bearish outlook: If the bull run at the moment fails to crack break above 0.9165, then the bearish outlook is still intact because this double bottom would actually be an expanded flat. This outlook is further confirmed if the RSI can stay below 60 in the 1H chart and push back below 40. Then a break below 0.9880 reflects bearish continuation with near-term pivot support at 0.9550 that opens up at least 0.88 when broken. This analysis is of a snapshot of the market and the anticipation based on the current conditions. Things may change, and adjustments are often needed especially when preparing for a trade. To follow up and explore trading plans and risk management techniques as well as fundamental bias and event risks, don't miss IBTrade's daily Market Intelligence Briefings live at 8:00AM EST throughout the week. To gain free access to these sessions, register at here at IBTrade. You will receive and email with the link and password before each session once you have registered.

Fan Yang CMT is the Chief Technical Strategist for IBTRADE, a trader, educator and a main contributor for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.