Bears close in on key lows

• USD/CHF is in a short-term downtrend which is falling towards a key low. 
• The pair is oversold according to the RSI and at risk of a pull back. 

USD/CHF trades lower in line with the dominant short-term downtrend after the pair established a sequence of descending peaks and troughs since the August 15 high. 

Given “the trend is your friend” the downtrend should continue, with the next key target lying at 0.8433, the key August 5 low. 

USD/CHF 4-hour Chart

The Relative Strength Index (RSI) momentum indicator is in the oversold zone indicating a risk of a pull back. A buy signal for counter trend reactions is given when the RSI exits oversold and closes back inside neutral territory (above 30). 

A decisive break below the August 5 lows would see the downtrend extend even lower, towards the next target at 0.8334. 

A decisive break would be one accompanied by a long red candlestick that broke well below the low and closed near its low or three red candles in a row that broke below the level.