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USD/CHF Signaling Reversal
- Daily and 4H: Yesterday, we anticipated a reversal from the 1.0030 area which is supported by the previous bottom. It was noted that the 1.0125 was an important short-term resistance, and if broken would signal a test of previous high at about the 1.0350 level. (Refer to Daily Technical Update 11.11.2009 USD/CHF ).
- The rally is materializing and is aggressive, signaling a reversal. On the the daily, if the market is able to close near 1.150, we have a very clear reversal candlestick combination, confirmed with a developing stochastic crossover.
- In the 4H timeframe, we have a sharp rally from a bottom and the pair may be due for a minor correction as it nears 1.0200. The 1.0180 area is the 50% retracement of the downswing and a small correction may follow.
- If this anticipated correction is rejected above 1.0100, we have a higher bottom and top, along with strong initial bullish signals. So we can consider the bullish case, but only in the short-term
- We see int he daily, that the long-term bearish mode is still intact (although we established that we are at a significant support.
- In the next post, we’ll go into the 1H timeframe to look at a more aggressive and short-term approach if we consider the bullish case.
Fan Yang
Currency Analyst,
Commodity Trading Advisor