The bounce off the low in the USDCHF has not been all that impressive. The move lower from the London high today reached 0.9134. The largest bounce off any low has been about 15 pips. The price is down testing the low for the day at the 0.90326. The bottom trendline support for the current hour comes in at the 0.9031 level.
On the daily chart, (as has been pointed out), a head and shoulder formation is forming. The neckline gets broken around the 0.9004 level. This should trigger stops and lead to a momentum move lower. The target would measure to the 0.8416 area but I prefer to target steps along the way. The first would be the low from February at 0.8929. The 200 day MA at the 0.8838 would be next (green line #2). Behind that is the 38.2% of the move up from the low (at #3 at 0.86265), followed by the low from October 2011 at the 0.8566 level (#4). Finally, the price would target the objective. Follow the steps on the break and you will be more in control.
