After a ranging market for days, USDCHF finally broke to the downside. The support level was a solid one, and was broken with bearish momentum. Now, market is retesting the support turn resistance. Based on the bearish structure, it makes sense to short the market at the given prices with a tight stop loss. Our target will be the next support, which is also a wick fill of the H4 candle. Our best guess is, USDCHF is creating a fakeout above the resistance and might drop back in.

The market has formed an ascending trendline, which has been pierced earlier. The validation of the breakout sells was confirmed and now we can anticipate a continuation towards the bearish side. There is no descending trendline, which could predict a bullish breakout buy. Therefore, more probability towards the selling side than the buying side.

The golden retracement level is far above the current market price. To get to the retracement level, market might turn bullish for the short term. It has to break the resistance level to continue up. In this setup, we will not be aligning the retracement with the levels.

Both the EMA 50 and 200 are in a bearish region, continuing a bullish death cross. The EMA 200 is being retested at the resistance level after the breakout. This will add as another factor for the bearish setup we seeking.

Both the oscillators are in their bearish region, near the neutral levels. The bearish region confirms that the market may continue dropping down. Also, there is no bullish divergence, which would negate the notion for a bearish sentiment.

Based purely on the market structure, USDCHF is a good short option from the price mentioned on the chart.

USDCHF sells from 0.9240

Oct 14 2021

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