USDCHF had carved a meaningful low around 0.9000 handle on August 31, 2020. The currency has since rallied through 0.9300 highs before pulling back. Bulls might have carved yet another higher low around 0.9190 levels and remain poised to push through 0.9400/50 in the near term.
USDCHF probable wave structure since 0.9000 lows is as follows: The rally from 0.9000 through 0.9200 was an impulse, hence potential Wave 1 in the chart here (not labelled). The subsequent drop through 0.9050 might be marked as potential Wave 2.
USDCHF further rallied through 0.9300 mark, which could be lower degree Wave 3 and the recent drop through 0.9190 could be Wave 4 respectively. If the above proposed wave counts hold true, USDCHF might be heading towards 0.9370/0.9400 as Wave 5 progresses.
Once the impulse rally completes around 0.9400 mark, USDCHF might prepare to produce a meaningful corrective drop towards 0.9200 mark, which is Wave 4 termination. Bulls are poised to remain in control for now and complete the impulse wave.
Alternately, if USDCHF continues to drop from here, the next support might come in around 0.9135 mark, the fibonacci 0.618 retracement of the recent rally between 0.9050 and 0.9300 respectively. Only a break below 0.9050 would change the above bullish structure.
Traders might remain inclined to hold long positions initiated earlier around 0.9050 mark and also look to add further around 0.9200 support. Protective stop might be placed below 0.9000 handle with projected targets towards 0.9400/50 in the near term.
Technical Analysis Team
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