Forex Technical Update
Pullback Over, Bearish Continuation:
- The USD/CHF was in a correction last week, rallying to an important pivot at 0.8280.
- It was not able to push above, and ended the last week threatening to resume the bearish trend.
- We start this week with a strong signal for the resumption of the bear run as a strong 4H marabuzo type of making fresh record lows (currently at 0.8020).
- Note the RSI reading in the 4H chart failing to break above 60, and now falling below 30. This confirms that the market has the momentum for the bearish continuation scenario.
- The bearish targets seen in the daily chart are 1)a range breakout projection to 0.7960 and 2) Swing projection to 0.7850.
- The main fundamental factor for the USD/CHF is going to be how the market reacts to the debt ceiling vote in the US, and how its government deals with the budget deficit.
- August 2nd could provide a temporal pivot for a correction especially if the market has completed a wave equality to 0.7850 or at even lower price levels.
- While we can expect some correction rally attempts after making fresh record lows, politics as usual can pressure the USD/CHF later in August.
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Fan Yang CMT
Chief Technical Strategist