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
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