Hello everybody! My forex pick for the day is the the US dollar (USD) versus the Swiss Franc (CHF) currency pair. As you can see, there could be 2-month rectangle pattern forming on the daily chart as for my technical analysis. Rectangles usually break with the trend and the one in USD/CHF could most likely be bearish as it’s coming from a downtrend. A breakdown could propel the value to 0.9000 psychological level which I got by gauging the size of the rectangle’s base and added it to the possible breakdown point. However, before it reaches that level, it first needs to revisit its 0.9300 all-time low and move pass below it. It’s now the 3rd attempt of USD/CHF to breach the support. Based on my experience, area patterns usually break on its 3rd attempt on a support/resistance. In case the USD/CHF doesn’t breakdown, it could bounce back up towards the 8-month downtrend. If that hurdle gets cleared out, the next resistance could be 0.9750.
Do you want a risky trade? Then you could anticipate a bounce and buy long at this area and place your stops below the support line. By the way, only around 1 out of 10 attempts is successful in catching a falling knife but the win/loss ratio could be promising. Still, you’re likely placed in a losing position. In that case, I’d rather wait for a breakdown and enter a short sell position. That’s just my two cents.