USDCHF Major Forex Pair

The USDCHF Forex pair has demonstrated a strong performance recently, as illustrated in the 1-day chart. The price encountered a supply zone, leading to a brief pullback, during which a new supply area was established. The price has returned to re-test the newly established supply area, indicating a potential shift in market dynamics. This movement has resulted in the formation of a daily wick rejection, suggesting selling pressure at this level.

Broken 4-hour Trend 

The USDCHF currency pair has recently displayed a clear formation of ABC waves as it approached a supply zone. Upon reaching this zone, there was a significant and aggressive reaction, resulting in a third touch of the established trend. Today, further observation reveals that the pair experienced another strong bearish impulse, which has led to a breakout from the prevailing trendline. Additionally, this movement has breached the higher low structure that was established yesterday.

Can We Identify a Trading Setup for Today?

Currently, the price action on USDCHF suggests the potential for a pullback toward the recently broken structure. Observing the formation of ABC waves during this movement could be beneficial. Once these ABC waves are established, it would be prudent to draw a trendline along them. A break of this trendline could signal an entry point for a short trade aimed at targeting the swing lows.

I will provide an update as soon as we observe more price action later on in the day. Thank you for your attention.

Update: Feb 6

Currently, this pair continues to exhibit signs of bearish momentum. I will monitor the situation closely to determine if the price presents a well-defined ABC correction today. An update will be provided later should this scenario unfold.