USDCHF: Recovers Higher, Threatens Price Extension
USDCHF: The pair closed higher the past week after halting its one-week weakness. This has opened the door for further upside possibly towards the 0.8924 level in the new week with a cut through here will aim at the 0.8952 level. This level if broken will aim at the 0.9000 level with a close above here eyeing the 0.9050 level and next the 0.9100 level. On the downside, support lies at the 0.8742 level where a break will turn focus to the 0.8700 level. A cut through here will set the stage for a run at the 0.8650 level and subsequently the 0.8600 level. If it violates this level it will resume its medium term downtrend. All in all, the pair remains biased to the downside in the medium term
USD/CHF since 29.07.2012 till now was in a downtrend that sellers were successful in achieving the lowest price of 0.86973. Price during the downfall with reaching to the important supportive level (0.87000) has stopped from more descend and has formed a bottom price in the level of 0.88358.Right now price is above 5-day moving daily time frame that show an uptrend during the next candles.
Currently in long term time frames such as monthly, and weekly , there is not a clear reason for price downfall and also in long period of time there is the possibility of growth of price to the Fibonacci levels of 38.2 in the level of 0.91200 and for the next time to 50% in the level of 0.92600.
As it is obvious in the picture below between the top price of 0.99692 and the bottom price of 0.86973, there is an ideal AB=CD harmonic pattern with the ratios of 78.6 and 127.2 that with completion of the D point (also formation of butterfly pattern in CD wave), there is a potential for ascending of price.Currently according to the condition of this currency pair and its strong downtrend in recent months, price is in saturation sell area and warns about a slight reformation in weekly time frame.
Attention to the USDCHF around the 0.8870, which is the 61.8% fibo from where it may retrace to the downside.