USD/CHF Ranging Between 0.9088 and 0.9264

The bearish bias we saw in the previous update did not materialize into a breakout to the downside. Instead the market edged lower but bounced off the 0.9088 level. A The 1H chart shows that this came after a bullish divergence with the RSI reading and the rally pushed this indicator of momentum above 70. This shows that the market is still ranging, as it re-establishes very short-term bullish momentum. A throwback that fails to break below 0.9130 would offer a good sign that the bears are weak, and a bullish attempt is still in play.The RSI should also stay above 40, preferably above 50 and push back above 60.The 4H USD/CHF chart shows that a range resistance starts near 0.9250 going up to 0.9262. As the market fails to re-establish bearish momentum (RSI failed to fall back below 40 and showed bullish divergence), it is now about to lose the bearish momentum if the RSI reading can push above 60. If it tags 70, we should be confirming a breakout from the consolidation range for a bullish retracement. This scenario has a viable target to 0.9340 (50% retracement and 4H 200SMA), with a more aggressive target to 0.94 near 61.8% retracement.

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Fan Yang CMT is the Chief Technical Strategist for IBTRADE, a trader, educator and a main contributor for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.