On May14, USD/CHF formed a
double bottom near 0.91. A correctional move up resulted in the
breakout of the ascending channel and further extentions up towards 23.6% (R3)
Fibonacci level applied to the channel breakout point. While R3 was rejected,
USD/CHF broke the key support level that is 61.8% Fibonacci – S1 (0.9302).
The bounce off the R3
resistance, break below the S1 support as well as CCI trendline breakout can be
treated as the confirmation of a valid downtrend. Currently, the pair is trading
between R1 (0.9370) and R2 (0.9439), which is a strong supply area.
Consider selling USD/CHF while
it is between R1 and R2. If the the downtrend is in the long term, it is better to target the nearest support area S2 (0.9239). Only a daily
closure above R2 (0.9439) could send the price higher to test R3 (0.9524). Even if R3 is tested, keep in mind that the long-term trend would still remain
Support: 0.9302, 0.9239
Resistance: 0.9370, 0.9438,
The material has been provided by InstaForex Company – www.instaforex.com