USD/CHF Technical Analysis: Candle Setup Warns of Downturn
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- USD/CHF Technical Strategy: Flat
- Support:0.9343, 0.9076, 0.8793
- Resistance: 0.9498, 0.9781, 1.0239
The US Dollar may be preparing to turn lower against the Swiss Franc after producing a Bearish Engulfing candlestick pattern. A daily close below resistance-turned-support at 0.9343, February 2 low, exposes the 23.6% Fibonacci expansion at 0.9076. Alternatively, a turn above the 61.8% Fib retracement at 0.9498 opens the door for a test of the 76.4% threshold at 0.9781.
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.