FX.co ★ UDS/CHF candlestick analysis for July 5, 2011

In a 4-hour graph the USD/CHF currency pair is testing the upper limit of the downtrend. Earlier the USD/CHF advanced amid a rebound off the 0.8275 level.
Earlier in a 4-hour graph the USD/CHF formed a Shooting Star candlestick indicating downside movement confirmed further.
This candlestick shows that the USD/CHF was demonstrating upside movement for several days, but rebounded after a fail to break 0.8946. At the next attempt of the bulls to fixate above 0.8900 the bears started to increase their influence, which resulted in formation of this candlestick.
Successful testing of the support level 0.8747 proved this point of view. Break of 0.8458 which is also the 61.8 Fibonacci projection 0.9342-0.8552 to 0.8946 targeted the pair to 0.8350. Break of the 0.8350 level caused downside movement to 0.8158 where the Fibonacci projection level 100.0 is located.
Stop loss should be placed slightly above the 0.8552 level as a break of this resistance level will target the pair to 0.8747 and will result in formation of a short-term bottom at 0.8275.