Weekly
• Last Candlesticks pattern: Doji
• Time of formation: 26 Sep 2016
• Trend bias: Sideways
Daily
• Last Candlesticks pattern: Shooting star
• Time of formation: 25 Oct 2016
• Trend bias: Near term up
USD/CHF – 0.9963
The greenback dropped again last week and has remained under pressure, adding credence to our bearish view that top has possibly been formed at 1.0171 earlier this month and consolidation with mild downside bias remains for test of 0.9930-35, however, a daily close below there is needed to confirm early rebound from 0.9861 has ended at 1.0171, bring further fall to said support at 0.9861. A drop below this level would revive bearishness and extend erratic decline from 1.0344 top for retracement of early upmove to 0.9850-55 (61.8% Fibonacci retracement of 0.9550-1.0344) and possibly towards 0.9800.
On the upside, whilst initial recovery to 1.0000-10 cannot be ruled out, reckon the Tenkan-Sen (now at 1.0052) would limit upside and bring another decline later. A break of the upper Kumo (now at 1.0103) would abort and prolong choppy trading within recent established broad range, however, said resistance at 1.0171 should remain intact. Only above 1.0171 would signal the erratic rise from 0.9861 (Jan’s low) is still in progress and may extend further gain to 1.0195-00, having said that, reckon key resistance at 1.0248 would cap upside and bring retreat later.
Recommendation: Sell at 1.0010 for 0.9810 with stop above 1.0110.
On the weekly chart, last week’s selloff adds credence to the indicated shooting star bearish candlestick pattern, justifying our view that the rebound from 0.9861 low has ended there and consolidation with downside bias remains for weakness to 0.9930-35, however, a weekly close below there is needed to confirm and signal the fall from 1.0344 top has resumed for retracement of early upmove to 0.9850-55 (61.8% Fibonacci retracement) and possibly towards the Ichimoku cloud bottom (now at 0.9722) but reckon downside would be limited to 0.9690-00 and price should stay well above support at 0.9550.
On the upside, expect recovery to be limited to the Tenkan-Sen (now at 1.0016) and price should falter below 1.0075-80, bring another decline. Only break of said resistance at 1.0171 would extend the rebound from 0.9861 to 1.0195-00 but price should falter below key resistance at 1.0248, bring further choppy trading. A sustained breach above this level would signal the retreat from 1.0344 has ended, bring further gain to 1.0335-44 resistance area but break there is needed to signal early upmove has resumed for headway to 1.0400-10 and later 1.0500.
