The USD/CHF pair is currently undergoing a corrective phase, resembling a three-wave ABC pattern. This correction follows a rally from the June 18th low of 0.8827 to the July 3rd high of 0.9051.
The pair is currently in the C wave of the correction, which could potentially extend further downward. However, it has already reached a conservative target for wave C, corresponding to the 0.618 Fibonacci retracement level of wave A. Further declines could find support at the 200-day Simple Moving Average (SMA) at 0.8883.
Potential Reversal Scenario
Alternatively, a decisive close above the July 10th high and the 50-day SMA at 0.9007 could signal a bullish reversal. In this scenario, the next target for USD/CHF would be the July 3rd high at 0.9051.
Key Technical Levels:
- Resistance: 0.9007 (July 10 high, 50-day SMA), 0.9051 (July 3 high)
- Support: 0.8883 (200-day SMA)
Outlook:
The USD/CHF pair is at a critical juncture, with potential for both further downside in the ongoing correction and a bullish reversal. Traders should closely monitor the 0.9007 and 0.8883 levels for potential breakout moves.
