USDCHF: With a third-week of decline as occurring the past week, further weakness is likely towards the 0.8798 level, its Dec 27 2013 low. Further down, support lies at the 0.8750 level with a cut through here paving the way for a run at the 0.8700 level, its big psycho level. Below here if seen will set the stage for more weakness towards the 0.8650 level. Its weekly RSI is bearish and pointing lower supporting this view. Conversely, to resume its short term uptrend now on hold, it will have to overcome its resistance residing at the 0.9037 level. This if seen could force further upside towards 0.9081 levels followed by the 0.9156 level, its Jan 21 2014 high. Further out, resistance resides at the 0.9200 level, its psycho. All in all, the pair remains biased to the downside medium term.
USD/CHF was in a downtrend during the recent weeks that sellers were successful in obtaining the lowest price of 0.88513.Currently price in long term time frames such as monthly , weekly and daily is under 5-day moving average and warns more descending in long term interval.In the H4 time frame, right now, the descending trend of the price has been stopped when the price reached the blue supportive line and the it formed the third bottom price on this line. There are two candle pattern on this line, Hammer and Spining top, which are good proves of sellers’ defeat to reach the lower prices and then formation of a bottom price.
As it is obvious in the picture below, there is AB=CD harmonic pattern(also Butterfly Harmonic Pattern) with ratios of 61.8 and 127.2 between top price of 0.91561 and the bottom price of 0.88513 that warns about changing price direction from the D point of this pattern.Stoch indicator in daily time frame (also in 4H time frame) is in saturation sell area and with the next cycle warns about ascending of price during the next candles.Generally until the bottom price of 0.88513 is preserved, the price has the potential for ascending in this currency pair.
