By Russell Glaser – Following an upward correction in the value of the USD/CHF, the pair is resuming its long term down trend. The long term trend line from the last bearish trend is now serving as a support level. A breach below this could signal further weakness in the pair.
Looking at the USD/CHF daily chart, the pair underwent a bullish correction during the last two weeks of October. The pair broke the previous downward sloping trend line and rose as high as 0.9970 but failed to close above the resistance level at 0.9930.
From this point the pair has renewed its downward trend and yesterday made a close below the short term rising trend line of the bullish correction. This may signal an end to the upward movement in the pair and further gains for the Swiss franc.
Momentum is to the downside as shown by both the sharp decline in price over the last 3 days and the Momentum (14) line that has a negative slope and is now crossing below the 100 level which can be interpreted as a sell signal.
Support for the pair is found at the previous long term bearish trend line at 0.9650. A close below the previous trend line could propel the pair to the swing low on the daily chart at 0.9460.
Resistance is found at the pivot of 0.9730, the 50-day simple moving average at 0.9815, and in a range between the pivot at 0.9930 and the height of the correction at 0.9970.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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