TECHNICAL ANALYSIS
On the daily chart, the USDCHF pair experienced a rebound around the 0.89 level and made a strong rally to retest the previously broken trendline. This surge, possibly influenced by month-end flows, led to the price becoming somewhat overextended, as indicated by its deviation from the blue 8 moving average. Typically, in such situations, we may anticipate a pullback towards the moving average or a period of consolidation before the next major move. Shifting our focus to the 4-hour chart, we can observe that the price is encountering some resistance around the previously breached trendline. It's reasonable to expect sellers to enter the market at this point, with a predefined risk level set just above the trendline, positioning for a potential decline towards the minor trendline and the 0.90 support level. On the flip side, buyers may look to find support around the minor trendline, where they will also encounter the red 21 moving average and the 61.8% Fibonacci retracement level. Zooming in on the 1-hour chart, we get a closer look at the bullish setup near the 0.9050 level. A bounce from this level could lead to another rally towards new highs. Conversely, if the price breaks lower, it could trigger a significant selloff, as sellers would likely increase their bearish positions with the aim of reaching new lows.
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