USDCHF Analysis – Price Accumulates Above Trendline for Further Reactions
USDCHF accumulates above a descending trendline to repress the bearish momentum by which the market is falling. Since dropping off its uptrend line, the market has been plunging forcefully. USDCHF is, however, now reaching critical market zones, which is repressing the bearish momentum in the market. This can be seen in the reaction of the market since it touches down at the 0.91570 critical level.
USDCHF Critical Zones
Resistance Levels: 0.93350, 0.92740
Support Levels: 0.91570, 0.91070
Sellers got to work immediately after the price broke out of its descending channel on the 13th of September. Because there was such strong bullish momentum, the bears had to carefully influence the market. After several days, USDCHF eventually conformed to a head-and-shoulder reversal pattern. As a result, the market diverted from its uptrend direction and plummeted.
USDCHF first dropped to 0.92190 before retesting the uptrend line and then sinking further to reach the 0.91570 critical zone of the market. Predictably, there was a sharp reaction as the price was repelled, but a retest below 0.92190 emboldened the sellers to crash into the critical level again, and it paid off as the market fell through. However, USDCHF finds a sterner test as it now accumulates above the border of the previous descending channel which is underlain by another critical support level.
The 4-hour chart shows how the price accumulates between the 0.91570 and the 0.91070 key levels and how it further interacts with the downtrend line between those levels. The current market formation has hampered the progress of sellers in further plunging the market. The RSI (Relative Strength Index) shows that the market has begun to recover as its signal line narrows up towards the middle line. The Elder Force Index is not undulating between a negative and positive value as bulls revive.
Price is expected to continue accumulating between these levels before releasing momentum to the upside towards 0.92190.
Note: Forexschoolonline.com is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.