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 – 0.9978
As dollar’s retreat from 1.0108 (last week’s high) has kept price under pressure, suggesting initial downside risk remains for weakness to 0.9960 (50% Fibonacci retracement of 0.9813-1.0108), however, if our view that a temporary low formed at 0.9813 is correct, downside should be limited to support at 0.9948 and bring rebound later, above 1.0067 would signal the retreat from 1.0108 has ended, bring retest of this level, break there would retain bullishness and extend the rebound from 0.9813 towards key resistance at 1.0171. Looking ahead, only a sustained breach above this level would add credence to our view that the erratic decline from 1.0344 top has ended at 0.9813, bring further rise to 1.0200-10, then 1.0250 but price should falter well below said resistance at 1.0344 (2016 high).
On the downside, whilst initial marginal weakness to 0.9960 cannot be ruled out, reckon minor support at 0.9948 would limit downside and bring another rebound. Below 0.9890-00 would abort and signal the rebound from 0.9813 has ended, bring another fall to this level. Looking ahead, only a drop below said support at 0.9813 would revive bearishness and signal the decline from 1.0344 top has resumed instead and extend further fall to 0.9735-40 (76.4% retracement of 0.9550-1.0344) and later towards 0.9700 but reckon 0.9650-60 would hold.
Recommendation: Hold long entered at 0.9990 for 1.0190 with stop below 0.9890.
On the weekly chart, although dollar’s retreat from 1.0108 (last week’s high) has continued pressuring the pair and weakness towards the Kijun-Sen (now at 0.9947) cannot be ruled out, reckon 0.9900 would contain downside and bring another rebound later, above 1.0067 would suggest the pullback from 1.0108 has ended, bring test of this level. A break above 1.0108 would extend the rebound from 0.9813 to resistance at 1.0171, however, a weekly close above this level is needed to confirm the fall from 1.0344 top has ended at 0.9813, bring further subsequent rise towards key resistance at 1.0248. A sustained breach above this level would signal early upmove has possibly resumed, bring test of 1.0335-44 resistance area, above there would provide confirmation and headway to 1.0400-10 and later 1.0500 would follow.
On the downside, expect pullback to be limited to the Kijun-Sen (now at 0.9947) and bring another rise later. A drop below 0.9890-00 would defer but only below said support at 0.9813 would abort and signal the erratic fall from 1.0344 top is still in progress, bring further decline for retracement of early upmove to 0.9735-40, then towards the lower Kumo (now at 0.9712) but reckon downside would be limited to 0.9640-50 and price should stay well above support at 0.9550.
