On the Daily chart above, as a result of the drastic loss dollar experienced on all the major pairs yesterday, on the USDCHF Daily chart, we would observe that price has broken the most recent Daily swing low @ 1.0668 (which we’ve highlighted using the upper blue broken line) downward. Also we would notice than price is currently in a lower high, lower low formation. These are good signs supporting a bias for downward price movement. However, there is a very major support area around the 1.0600 level, this support area has remained a critical level since May 2008 (please refer to your Weekly and Monthly charts); hence, we should be very careful as the bears might be contending with some fierce bulls around this level.
On the H4 chart above, price broke the most recent swing low @ 1.0725 (which we’ve highlighted using the blue broken line) downward. This automatically shifts our bias in favor of a downward price move. The white horizontal line @ 1.0779 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact. Please, as you seek opportunities to go Short, bear in mind the critical support area around the 1.0600 level. As a conservative trader, you may want to wait for a clean break.However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.
Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
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