- USD/CHF is running into a key daily resistance area.
- Bulls will seek a discount in pursuit of a meaning full monthly correction.
USD/CHF has shot through daily resistance structure and has moved up to test the supply territory in the 0.91 and 0.92 areas.
The following is a top-down analysis that opens the prospects of a daily bearish correction followed by a bullish correction on the monthly time frames.
Monthly deeper correction expected
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From a monthly perspective, while there has been a wick to test the 38.2% Fibonacci retracement, a more convincing correction may well still be on the cards in the coming weeks.
Daily reverse head and shoulders prospects
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For the meantime, the bulls have been up to test the daily resistance, shooting through the structure which would be expected to act as support on a meaningful and healthy downside correction.
Bulls can monitor for bullish conditions following a run to the structure which would open the case for a bullish reverse head and shoulders pattern and compliment the forecast of a deeper monthly correction.
The outlook to the downside would coincide with a tiring DXY chart:
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