USDCHF Holding Steep Trendline

The USDCHF pairs appreciation from the end of the 3rd quarter through the 4th quarter of 2011 has been supported by the trendline support below. The moving averages have also turned positive with the 100 day breaking above the 200 day and the pair above the 92.50 area where there has been resistance from last March are all bullish signals.

USDCHF tests the 0.9080/88 target and backs off a bit

The USDCHF is up testing the ceiling area over the last few days of trading and has found some profit taking sellers on the first test.

On Friday and again earlier  today, the price in the pair tested 50% Fibo support and the 200 hour MA (green line in the chart above). The ability to hold these key technical levels (and deflation risks/fear in Switzerland) have the pair moving to the upside today. The move has taken the price above the 100 hour MA (currently at 0.9037 – blue line).  Staying above this moving average keeps the bulls in charge in the medium term. 

Closer support for the pair comes in at the 0.9057 level where channel trendline on the 5 minute chart is found (see chart below). The bottom trendline has held on a number of occassions (so has topside resistance). Traders seem comfortable with the channel. Watch this trendline on dips today. 

A break of the 0.9080-88 level is needed to solicit more buying in the pair.  The high for the month comes in at the 0.9149 and the high for October comes in at the 0.9313. These would be upside targets for the pair.

SNB officials continue to feel the CHF is largely overvalued despite the intervention (mainly in the EURCHF).  The

USD/CHF Follows Through on Head-and-Shoulders Pattern Breakdown

USD/CHF (daily chart) as of Thursday (10/27/2011) has extended its fall substantially after breaking the neckline of a well-formed head-and-shoulders reversal pattern. Thursday’s price action saw the pair drop more than 200 pips to hit a 7-week low just below 0.8600, approaching key support in the 0.8550 price region. 0.8550 represents a key level that has been respected several times in the past both as support and as resistance. With price approaching such low levels, bearish momentum off the reversal pattern could well extend further to the downside. In the event of a breakdown below 0.8550, price action could begin targeting further downside around the next key support level below, in the 0.8275 price region.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

USD/CHF Stalls Above Key Support within Uptrend

USD/CHF (daily chart) as of Monday (10/17/2011) has stalled above key support in the 0.8900 price region, emphasizing this level as the current price region to watch for key events to occur. At the moment, that key event has been a slight bounce that has highlighted 0.8900 as the most important support/resistance area within the context of the current bullish trend that has been in place since the early September breakout above the previous long-term downtrend. 0.8900 has served several times in the past as a turning point both as support and as resistance. A continuation of the current uptrend would be the likely bias if price is able once again to reach towards its strong upside resistance target around 0.9300, which is another key support/resistance region that price respected in early October, less than two weeks ago. If instead there is a strong subsequent downside break below 0.8900, the current downtrend will have been placed in serious danger of trend change, with the next major downside target around the equally strong 0.8550 support/resistance price region.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

USD/CHF New Bullish Trend Targets Higher Highs

USD/CHF (daily chart) as of Wednesday (10/05/2011) has continued to display a strong bullish bias in line with the new bullish trend that has been in place since the prior long-term downtrend was broken to the upside in early September. After that trend breakout, the new uptrend has been displaying the characteristics of a well-formed and technically-behaving bullish trend, reaching for progressively higher resistance levels while retracing back down to key support levels. These retracements and trend continuations have taken the form of at least two flag continuation patterns that have proven useful in describing the current bullish trend. Most recently, after having broken out above key 0.8900 prior resistance, price action pulled back down to bounce at that level, this time as support, and is now targeting its current immediate upside target around the 0.9300 resistance region. On a breakout above 0.9300, the next major upside resistance target resides around the 0.9500 price region, which not only represents an important prior support/resistance level and psychological price level, but is also around the 161.8% Fibonacci extension of the last major bearish run.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

USD/CHF Pulls Back within Strong Bullish Trend

USD/CHF (daily chart) as of Tuesday (9/27/2011) has pulled back yet again in what is turning out to resemble a well-formed bullish trend characterized by strong breakouts to the upside interspersed with bearish pullbacks, or retracements. If price action continues this pattern of higher highs and higher lows, the uptrend that was started early in September on the strong breakout above the previous long-term 15-month downtrend, should gain further strength. After that breakout, price has gone on to breakout above progressively higher resistance levels, including the 0.8275, 0.8550, and 0.8900 price regions. The next major resistance level to the upside resides around the 0.9300 price region, which the pair targeted but was unable to reach late last week before correcting back to the 0.8900 region today. If the 0.8900 area is able to hold, price should once again target the 0.9300 level and a continuation of the new uptrend for USD/CHF. A breakdown of this level could presage a sideways consolidation for the pair going forward.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

USD/CHF Turns Back Up to Target New Highs

USD/CHF (daily chart) as of Tuesday (9/20/2011) has once again risen to re-test key resistance around the 0.8900 price region, a level that was just tested and essentially respected early last week. After last week’s resistance test, price pulled back slightly in its trend-breaking bullishness, to the 0.8645 price region, before turning back up. Now that price has re-tested key resistance, a strong break to the upside, which would continue the bullish breakout momentum and add further confirmation to an overall change in trend for the pair, could go on to target further upside around the 0.9300 resistance region. A turn back to the downside from resistance, which would further strengthen this resistance region, could target strong downside support once again around the 0.8550 price region.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

USD/CHF Continues Rise to Hit 0.8900 Area Resistance

USD/CHF (daily chart) as of Monday (9/12/2011) has continued its trend-breaking rise to hit key resistance around the 0.8900 price region before stalling in its dramatic bullishness of the past week. This occurs after a strong and swift bullish surge early last week broke out above an important downtrend resistance line that had been in place since the June 2010 high. This breakout was a highly significant move that has brought price well above its recent record lows. Now that price action has reached this key 0.8900 resistance, price is yet again at a critical juncture. A break to the upside, which would continue the bullish breakout momentum and add further confirmation to an overall change in trend for the pair, could target further upside around the 0.9300 resistance region. A turn back to the downside, which would represent a pullback in the bullish surge, could target strong downside support around the 0.8550 price region.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

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