I am analyzing Friday's trading session on the USDCHF currency pair, and I see that it closed with a bullish candlestick. I note that the price is currently sitting at 0.7756, and from my perspective, this is a critical juncture. I have identified that buy targets have clearly formed on the hourly chart, which suggests to me that the bulls have been in control. I am looking at the first target, which is the Fibonacci level 161.8 at 0.7763, and I can confirm that this target has already been reached. I then shift my focus to the second target, the Fibonacci level 261.8 at 0.7822, as I believe this is the next significant level to watch. Furthermore, I also see a third target, the Fibonacci level 423.6 corresponding to 0.7919, which I consider a more ambitious but possible objective if the upward momentum continues. I am carefully monitoring these levels to gauge the strength of the current trend and to plan my potential entries
However, I must also consider a critical development that I have observed on the chart. I have spotted a two-fractal bearish candlestick pattern forming, and I interpret this as a potential hint for an impending decline. I am taking this signal seriously because it could indicate that the bullish momentum is waning. I have established a key condition in my analysis: if I see a break of the support level at 0.7710, I will immediately cancel my entire upside scenario. For me, a breach of this level would invalidate all the bullish Fibonacci targets I have outlined. In that specific case, I would completely shift my strategy, and I would start looking for sell targets instead of buy targets. I would then be prepared to sell the pair, with my primary target being a decline down to 0.7600. I feel confident in this bearish outlook if the support breaks, and I would even consider holding my position for a further decline if I see a decisive breakout below 0.7600. I am ready to act on either scenario, but I am waiting for the market to give me a clear signal based on the price action around these crucial levels.
