After a strong rally in late June and early July, USD/CHF is now in a corrective phase, currently unfolding the wave C of an ABC corrective pattern. This correction is a result of the rally that occurred between the June 18 lows at 0.8827 and the July 3 peak at 0.9051. The pair is declining in what appears to be the wave C of a three-wave correction, with the possibility of falling further before reaching the end of the correction.
On the daily chart, USD/CHF has not yet completed wave C, but it has already reached the conservative target for C, which is the Fibonacci 0.618 ratio of the length of wave A. If the pair continues to decline, it could find support at the 200-day Simple Moving Average (SMA) at 0.8883. However, a close above the July 10 high and the 50-day SMA at 0.9007 would likely signal a reversal higher, with the next target at 0.9051, the July 3 high.
In conclusion, USD/CHF is currently in a corrective phase after a significant rally in late June and early July. The pair is unfolding the wave C of an ABC corrective pattern, with the potential for further downside movement before completing the correction. Traders should keep an eye on key levels such as the 200-day SMA at 0.8883 and the 50-day SMA at 0.9007 for potential support or resistance. A break above the July 10 high could signal a reversal higher towards the July 3 peak at 0.9051.
