USDCHF has dropped to potential support zone around 0.9320/30 yesterday. The drop has come as no surprise since the US Dollar has lost across major currency pairs, in the last 2 trading sessions. The currency trades around 0.9325 levels for now and would be interesting to see the reaction here.
USDCHF probable medium term wave counts are as follows: The currency had dropped to 0.9180 levels in February 2020. Since then, bulls were back in control and produced a religious rally towards 0.9900 mark.
The above rally was an impulse wave hence labelled as Wave 1 on the chart (not seen here). As a general guideline, an impulse rally is usually followed by a corrective drop A-B-C flat or a zigzag. In this case USDCHF also produced a corrective drop, which seems to be a zigzag.
Also note that the proposed corrective drop A-B-C since 0.9900 levels might have terminated around 0.9320 levels. Furthermore, the fibonacci 0.786 retracement of the earlier rally is also seen passing through 0.9330 levels respectively.
Going further the potential lower degree wave counts are also suggesting that Wave C might be complete around 0.9320 lows yesterday. An ending diagonal structure unfolded as potential wave 5, within Wave C.
Resistance is seen around 0.9467 levels, and a break higher would confirm that USDCHF has carved a meaningful bottom around 0.9320 levels. Aggressive traders might be prepared to initiate fresh long positions now (0.9330), with stops below 0.9300 respectively.
Technical Analysis Team
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