The broad US dollar index traded deep in the red Monday, extending losses from multi-year highs. This weighed on USD/CHF, with the candles seen closing in on the 0.9542 September 21st low (2018), seen clearer on the weekly timeframe. 0.9410/0.9516 offers potential support beyond the aforementioned low on the weekly timeframe (green) – comprised of a 78.6% Fibonacci retracement at 0.9410, support at 0.9441 and a 127.2% AB=CD bullish correction (black arrows) at 0.9516.
A closer reading of price action on the daily timeframe had the pair nudge through Quasimodo support at 0.9600 yesterday. Although never a good sign, the Quasimodo formation is not considered consumed until its extreme low is taken, which is set around the 0.9542 September 21st low (2018) mentioned above.
Across the page on the H4 timeframe, Quasimodo support at 0.9551 held price higher Monday, forcing a revisit at the underside of 0.96, which for the time being, is holding firm. Beyond 0.9551, we see little stopping the market from reaching 0.95; however, lets remain aware that the top edge of a weekly support area is seen at 0.9516, and the daily Quasimodo support at 0.9600 is effectively being retested as resistance on the H4 timeframe.
In the event 0.96 holds today and we see further attacks on H4 Quasimodo support at 0.9551, its likely we’re headed for the weekly support area mentioned above at 0.9410/0.9516.
Moves lower from current price could come to fruition off 0.96, though the threat of buying is there from daily Quasimodo support. On the other side of the coin, weekly traders might want to whipsaw through the 0.9542 September 21st low (2018) to run stops and use liquidity to recover from weekly support at 0.9410/0.9516.
Disclaimer: The information contained in this material is intended for general advice only.