Since 9 March 2020, the USDCHF currency pair on the 4 Hours Chart has followed an upward course, having found support at 0.91818 points. The reversal pattern, known as the Morning Star of the Japanese candlestick, marked the upward bias.
The low prices attracted investors who flooded the market with long positions. This is dragging the Swissy to higher rates following a trend of higher tops and higher bottoms.
Evening Star Pattern
The currency pair subsequently developed an Evening Star pattern near the 0.94109 resistance level. Which hinted at the rally’s end and the potential start of a decline.
After applying technical analysis to the price chart, Evening Star’s last Japanese candlestick managed to close below the 10-period Exponential Moving Average axis. This points to the downward trend and bearish bias in the market.
Furthermore, the Relative Strength Index Oscillator reports values below the fifty line, reflecting the negative market sentiment.
Both technological metrics and the reversal pattern of the Japanese candlestick agree about the downward tendency of the pair.
Confirmation by Fibonacci
In fact, the present price is trading below the trend line upwards. This also means that supply is greater than demand.
Applying the Fibonacci Retracement tool to the low price of the Bearish Japanese candlestick for 0.93260 and dragging it to the pattern’s high price at 0.94017. There were three determining price targets. The first price target, estimated at 0.92503 (200%), the second price at 0.91746 (300%), and the third price at 0.9%.
Naturally, it remains to be seen how both the crowd psychology and the sellers’ pressure can continue to maintain market control and drive the USDCHF pair down.