USDCHF has dropped below 0.9180 support and managed to print lows around 0.9155 levels yesterday. This could still be considered as test of previous swing lows at 0.9180 and bulls might be back in control sooner than expected.
USDCHF probable wave counts are as follows: The entire drop from 1.0237 through 0.9155 seems to be corrective. A potential combination might have unfolded since 1.0237 levels around April 2019. It could be seen as A-B-C-X-A-B-C, of which the final A-B-C drop has been labelled here.
Looking at the drop since 0.9900 highs in March 2020, it seems to have unfolded into 3 waves, labelled as Waves A-B-C. The fibonacci 1.618 extension of Wave A has been almost met around 0.9142 levels. If the above counts hold well, USDCHF might soon resume higher from here.
Immediate price resistance is seen around 0.9467 and a break higher would confirm that USDCHF has carved a meaningful low around 0.9155 levels. Also a push above the counter trend line would place it in the buy zone, which is constructive for bulls.
If the above structure unfolds as discussed here, USDCHF would be on its way to push higher toward 0.9900 levels. Potential remains for a push above 1.0237 resistance as well, going forward. Resistance on the smaller time frame is at 0.9237 and a break higher would be constructive for bulls.
Traders might be prepared to initiate fresh long positions from close to 0.9155/80 levels with protective stops below 0.9100 levels and projected targets towards 0.9900 respectively.
Technical Analysis Team
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