USDCHF Potential Bottom Carved Around 0.9050

5 August 2020

USDCHF might have carved a potential bottom around 0.9050 levels over the last week. The currency had rallied sharply towards 0.9241, almost 200 pips from its Friday lows, before pulling back. Bulls are looking poised to remain in control from here.

USDCHF probable wave counts are as follows: It seems that USDCHF might have completed a corrective double zigzag at a larger degree. The last portion of the corrective pattern is highlighted from 0.9900 levels.

The drop is an A-B-C (5-3-5) pattern, which could the end of the double zigzag structure. Please note that USDCHF has also hit the fibonacci 1.618 target around 0.9140 levels. If the above structure holds well, prices should stay above 0.9050.

Furthermore, USDCHF should continue its rally towards 0.9450 levels, which is immediate resistance marked on the chart here. A break above 0.9450 would be constructive for bulls and also confirm that they are here to stay for long.

Alternately, if the recent rally is Wave 4 within a 5 wave drop that had begun from 0.9900 earlier, USDCHF will break below 0.9050 levels going forward. Once the 5 waves are complete, we can expect a counter trend rally.

Traders might remain inclined to initiate fresh long positions around 0.9100 mark, with protective stops below 0.9050 and projected targets above 0.9450 and 0.9800 respectively. Only a break below 0.9050 would delay matters further.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

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