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 – 1.0071
Although the greenback rose to 1.0171 last week, the subsequent retreat suggests top is possibly formed here and consolidation with mild downside bias is seen for test of the Kijun-Sen (now at 1.0038), however, break of previous support at 1.0009 is needed to add credence to this view and bring further fall to another previous support at 0.9967. Looking ahead, a daily close below this level is needed to suggest the rebound from 0.9861 has ended and bring further fall to 0.9935-40 but said support at 0.9861 should hold. 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 1.0100-10 cannot be ruled out, reckon 1.0140-45 would limit upside and bring another decline later. A break of said last week’s high at 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. Only a daily close above this level would signal recent correction from 1.0344 top has ended at 0.9861, bring further gain to 1.0300 and later retest of 1.0344 which is is likely to hold from here.
Recommendation: Sell at 1.0110 for 0.9910 with stop above 1.0200.
On the weekly chart, as dollar has retreated after rising briefly to 1.0171, a shooting star bearish candlestick pattern was formed and if this week ends with a black candlestick, this would suggest the rebound from 0.9861 low has ended there and consolidation with mild downside bias is seen for weakness to 1.0009, however, only a weekly close below support at 0.9967 would add credence to this view, bring test of the Kijun-Sen (now at 0.9947), break there would extend fall to 0.9900, then retest of 0.9861. A break of this level would revive near term bearishness for the fall from 1.0344 to bring retracement of early upmove to 0.9850-55 (61.8% Fibonacci retracement) and possibly towards the Ichimoku cloud bottom (now at 0.9722), however, 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 1.0100-10 and price should falter below said resistance at 1.0171, bring another retreat later. Above said resistance at 1.0171 would extend gain 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.
