The downtrend on the 240-minute chart is following the overall Directional Bias of the daily USD/CHF as prices continue to slide. The U.S. Dollar Index has maintained support around the 74.00 area with 73.93 holding as the low. The franc has continues to gain on the dollar despite the dollar’s near-term floor.
The expectation for follow-through lower comes from the red GRaB candles and the steady “four to six o’clock” angle of the 34EMA Wave. The Falling Wedge chart pattern has significant implications for not only a potential short sell on the 240-minute chart but also helps identify where buying momentum could trigger a longer-term, intraday trend reversal.
Watch the downtrend line resistance of the pattern which is traveling lower between the 20 period SMA and 34 period EMA low; if prices rally to this area it will trigger a trend-following short entry on the correction higher. Be cautious because if the pair can attract buying momentum at 0.8850 prices could make a run for 0.8870 and test the 34 period EMA high and challenge the validity of the downtrend.