USD/CHF 4H Chart 11/27/2012 10:05AM EST
Trendline breakdown: The previous update observed the breakdown of a rising trendline that went back to October. The break has extended until 0.9253 so far this week. It should be noted that the decline goes against a rally since October, but overall price action since September has been pretty much sideways with lows around 0.9214 and 0.9238, which is in focus now after last week’s trendline breakdown.
Bullish divergence, retracement targets: Before, that it appears the USD/CHF might be due for at least some very short-term correction. The 4H chart shows a bullish divergence with the RSI. If there is a pullback indeed, a conservative target is the 0.9350 level, near 38.2% retracement. A slightly more aggressive but quite valid retracement target is 50% at 0.9382, or a bit lower at the 200-4H SMA around 0.9365. A break above 0.94-0.9412(61.8% retracement) makes the bearish outlook unclear. Also, look for the 4H RSI to hold below 60 if the bearish outlook is to remain healthy.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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