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As bears challenge the 200-EMA, the odds of a bearish reversal increase for the USD/CHF
As the asset approaches the 200-EMA, bearish reversal indications intensify. A proactive selling structure close to the 200-EMA contributes to the negative filtering. The RSI (14) has not yet turned negative and indicates that a consolidation is imminent.
After demonstrating erratic movement on Monday, the USD/CHF pair has moved sideways. The asset faces resistance at 0.9780 and is anticipated to trade sideways till volatility subsides. The asset saw a significant decline after failing to surpass the important resistance level of 0.09000.
After failing to stay above Tuesday's high at 0.9859, the creation of the Double Top chart pattern predicted a severe bearish reversal. The aforementioned chart pattern often suggests diminished purchasing interest at lofty levels. In addition, the emergence of a selling tail around high levels has increased the likelihood of a negative reversal.
The asset is creating an initiative selling structure following the construction of a double top, which suggests the entry of those investors who begin short positions after a bearish bias has been established. At 0.9767, the major is creating an initiative structure within the boundary of the 200-Exponential Moving Average (EMA), indicating that market players are honoring the crucial EMA.
Nonetheless, the Relative Strength Index (RSI) (14) has moved into a range between 40.00 and 60.00, indicating an impending consolidation. A strong decline below the July 13 low of 0.9758 will lead the asset to the July 5 peak of 0.9705. A break of the latter threshold will expose the asset to more losses towards the 1 July high of 0.9642.
Alternatively, the dollar bulls might defend the double top formation after Wednesday's breach of the 0.9827 high. This will propel the asset to Thursday's peak of 0.9886, followed by psychological resistance at 1.0000.
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