USDCHF might be preparing to rally towards 0.9900 and higher, as bulls are looking inclined to be back in control from current price action around 0.9405 respectively. Intermediary support is seen towards 0.9180 mark and USDCHF structure remains bullish until prices stay above that.
The larger degree potential wave counts for USDCHF are as follows: USDCHF had rallied from 0.9180 through 0.9900 as an impulse wave, which has been labelled as Wave 1 on the daily chart. A corrective wave/drop was expected after that.
USDCHF produced a counter trend, corrective drop A-B-C as labelled here. Wave A terminated around 0.9500 mark, followed by Wave B which unfolded as a triangle and terminated close to 0.9800 mark. The final Wave C dropped to 0.9360 levels.
Also note that the corrective drop had managed to find support close to fibonacci 0.786 retracement around 0.9330 levels. If the above counts hold well, USDCHF might be looking to resume higher towards 0.9900 and higher as Wave 3 rally unfolds.
Only a consistent drop below 0.9330, which is the last fibonacci retracement/support would turn the structure to bearish. Until that, we favour a bullish reversal anytime soon as traders might prepare to initiate fresh long positions.
Immediate resistance is seen towards 0.9530/50 mark and a break higher would confirm that bulls are back in control. USDCHF would certainly turn a buy on dips chart thereafter.
Technical Analysis Team
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