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USD/CHF Candlesticks and Ichimoku Analysis

    •    Last Candlesticks pattern: Shooting star
    •    Time of formation: 7 Mar 2017
    •    Trend bias: Sideways

    •    Last Candlesticks pattern: Morning star
    •    Time of formation: 9 May 2017
    •    Trend bias: Near term up

USD/CHF – 0.9907

Although the greenback found renewed buying interest at 0.9846 and recovered, reckon upside would be limited to 0.9985-90 and near term downside risk remains for the retreat from 1.0039 temporary top to bring another corrective decline, below said support at 0.9846 would extend weakness to 0.9800-05, however, reckon support at 0.9737 would hold and bring rebound later. Above 0.9950-55 would bring test of 0.9985-90 but break of indicated resistance at 1.0018 is needed to signal the pullback from 1.0039 has ended, bring retest of this level first.

On the downside, whilst initial weakness to 0.9800-05 cannot be ruled out, as long as support at 0.9737 holds, prospect of another rise to 1.0039 remains. A daily close below said support at 0.9737 would signal a temporary top has been formed instead, bring test of previous support at 0.9700, below there would confirm and bring retracement of recent upmove from 0.9421 to minor support at 0.9670, then 0.9642 (another support) but reckon downside would be limited to 0.9590-00 and support at 0.9565 should remain intact.

Recommendation: Buy at 0.9770 for 0.9970 with stop below 0.9670.

On the weekly chart, the greenback slipped last week and a black candlestick was formed, retaining our view that further consolidation below recent high at 1.0039 would be seen and pullback to the Tenkan-Sen (now at 0.9841) is likely, however, reckon downside would be limited to 0.9770 and bring another rise later, above last week’s high at 0.9987 would suggest the pullback from 1.0039 has ended, bring retest of this level, break there would extend the rebound from 0.9421 low to previous resistance at 1.0100-08, having said that, near term overbought condition should prevent sharp move beyond previous resistance at 1.0171 and 1.0200-10 should hold from here.

On the downside, although initial pullback to the Tenkan-Sen (now at 0.9841), then 0.9800 is likely, reckon 0.9770 would limit downside and bring another rise later. Below 0.9730-37 (current level of the Kijun-Sen and previous support) would defer and signal top is formed instead, this also suggest first leg of rebound from 0.9737 has ended and bring weakness to 0.9690-00, however, reckon support at 0.9642 would limit downside and price should stay above support at 0.9565 and the greenback shall stage another strong rebound next month.

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