USD/CHF (daily chart) has dropped to hit a rough triple bottom just above the 0.9200 support region. In the process, it has established a new 7-month low. After the first bottom was hit in mid-September, price began forming a broadening pattern that has extended to the current third bottom. Broadening formations can be considered potential swing trading areas within the pattern bounds. But with the overall trend being bearish from the July 0.9970 high, a breakdown below the pattern’s support region, around 0.9200, would break down this broadening formation and confirm a bearish trend continuation. In that event, price could move towards further potential downside support around the significant 0.9000 level. If price respects the 0.9200 area support with a bounce, the broadening pattern could continue with potential upside resistance around the 0.9400 and then 0.9500 price regions.
James Chen, CMT
Chief Technical Strategist
FX Solutions
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