In a previous analysis we noted that at 0.89 USDCHF we prefer to be bullish with stops at 0.8850 and target at 0.90-0.9050. Price moved all the way to 0.8850 but at the end of the week price is back at 0.89. I believe bears need a break, that is why I continue to support this short-term trend reversal.
Blue lines – bullish divergence
Green line – resistance
As long as price is below the green trend line resistance trend is bearish. However the bullish RSI divergence makes me expect a bounce towards the green trend line resistance around 0.90-0.9050. If next week USDCHF does not bounce strongly towards 0.90 then I do not believe we are going to see this bounce soon. Support and stop for our bullish view is now confirmed at today’s low at 0.8850.