USDCHF Carves A Potential Low At 0.9050

12 August 2020

USDCHF holds above 0.9050 lows formed over the last week and trades close to 0.9200 handle as we write this article. The currency has turned higher but needs to clear above 0.9250 resistance to confirm a bottom is in place and bulls are back in control.

USDCHF probable wave counts are as follows: At a larger degree, USDCHF might have completed a double zigzag corrective pattern since 1.0200 highs through 0.9050 lows recently. Ideally, the currency should either rally above 1.0200 or at least produce a corrective rally.

If the above proposed structure holds well, USDCHF should remain above 0.9050 and push towards 0.9900 resistance over the next few trading sessions. Immediate price resistance is seen towards 0.9467 levels and a break there would be encouraging to bulls.

Also note that the drop from 0.9900 through 0.9050 looks complete as a corrective wave A-B-C. USDCHF has hit fibonacci 1.618 extension of Wave A towards 0.9140 and carved a potential bottom around 0.9050 levels respectively.

Also note that Wave B had unfolded as a triangle, followed by Wave C, which sub-divided into 5 waves towards 0.9050 lows. A minimum move from here should be towards 0.9900 levels, before deciding further course of direction.

Traders might be prepared to hold long positions taken earlier with a protective stop just below 0.9050 mark. The target potential could be 0.9470 and higher towards 0.9900 respectively. Only a drop below 0.9050 wold be of concern to bulls.

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