USD/CHF (daily chart) as of October 25, 2012, has made yet another attempt at breaking out above a solid bearish trend that has been in place since the July 0.9970 high. Despite the bullish effort, however, price has not yet been able to make a convincing enough move to the upside that would significantly disturb the entrenched bearish trend. Yesterday’s price action formed a doji shooting star candle pattern that attempted a move up to break the bearish trend line, but has been unable to follow-through to the upside as of yet. This tentative price rejection/failure provides some indication of a possible resumption of the bearish trend bias. The low on the current downtrend resides just above the 0.9200 support level, which was approached just last week before the current upside correction. If price is able to continue its bearish trend with a breakdown below 0.9200, price could move towards a retest of the key 0.9000 level. To the upside, if the current bullish correction is ultimately able to follow-through with a strong breakout above the bearish trend line, immediate potential resistance to the upside resides around the 0.9425 level.
James Chen, CMT
Chief Technical Strategist
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