Risk aversion has been keeping the franc’s gains at bay, as USD/CHF recently bounced off the .8900 major psychological support. Perhaps franc bulls are waiting for more buying momentum before pushing this pair lower.
With that, the pair could still pull back to the falling trend line forming on the 1-hour time frame before resuming its drop. This is in line with the 61.8% Fibonacci retracement level, right around the .9100 former support level.
However, the recent resistance at the .9000 major psychological level could already hold as stochastic is already in the overbought region. Shorting at market with a stop above .9100 and aiming for new lows would be a good position trade. Moving the stop loss to entry once the pair tests the .8900 support can help minimize risk.
By Kate Curtis from Trader’s Way