Forex Technical Update
The USD/CHF's intraday pullback attempts during the week have been brief and have been followed by very convincing bearish continuation action seen in the 4H chart as it falls in a declining channel. Price action has been dominantly bearish as well. The market may be approaching oversold conditions both reflected by the RSI reading falling below 30, and price action trading near the lower bollinger band in the 4H chart (3 standard deviations from the 200 SMA). But there is still room to fall.
Looking at the daily chart, there are a couple of levels of interest to monitor. 50% Retracement at 0.9070 could be the near-term support for some intra-day consolidation. But after a pullback, as long as it does not pop back above 0.93, USD/CHF still has risk to the downside. 61.8% retracement is at 0.8950 and there was a pivot here as well. However, if you take the swing that developed in October 2011, and projected from the 0.9573 high, we have a measured move targeting 0.8850.
So these are your most conservative near-term target of 0.9070 down to 61.8% retracement at 0.8950 and then a swing projection to 0.8850.
Fan Yang CMT is the Chief Technical Strategist of IBTRADE and FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.