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Home » Technical Analysis » Daily » CHF » USD/CHF – From Trendline Breakout to Range Resistance

USD/CHF – From Trendline Breakout to Range Resistance

Forex Technical Update

Previous: USD/CHF Bounces off Trendline Support (10/24)

USD/CHF Daily Chart 11/4/2012 9:18M EST

USD/CHF 11/5/2012 daily chart

Trendline Breakout: The USD/CHF had a strong day on Friday after a strong October NFP data of 171K new jobs compared to the 125K average forecast by economists. This boosted the US Dollar against the Swiss Franc. This rally also comes as a bounce off a previously broken trendline resistance. The next focus is now the recent range resistance around 0.9430, which was a support pivot back in June.

Range-bound: The break of the trendline reflects a change to the bearish trend defined by the swing from 0.9971 2012-high to October’s low of 0.9213. However, the change was from bearish to sideways so far. Note that the daily RSI reading is just under 60. A break above reflects a loss of the bearish momentum, but a hold between 60 and 40 is consolidation momentum.

Breakout targets: A price break above 0.9430 and the daily RSI pushing above 60 will be signs of a bullish breakout. This will clear above the 200-day SMA, which removes a condition of bearishness. A couple of short-term targets are the 38.2% retracement of 0.9503, which was a previous support pivot. 50% retracement is just under 0.96 handle, and 61.8% retracement at 0.9681 is in a previous resistance/support pivot area. A range breakout target (using the width of the range projected from the break point) is around 0.9620.

Failure: I consider the central pivot to be around 0.9330. A break below this refocuses the USD/CHF to the support area of the recent range, and shelves the bullish breakout scenario.

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.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.

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