(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; chart patterns in white; 50-period simple moving average in light blue.)

2/12/2009 – USD/CHF – Price action on USD/CHF (a daily chart of which is shown) has been consolidating in a rising wedge formation for the past several weeks. Currently around the vertical middle of this wedge, the pair has recently been wavering in indecision. This consolidation can be seen as a lull before an inevitable directional push. Momentum oscillators like the displayed Stochastics are hinting at a bearish bias. Triggers for possible long and short opportunities occur at the wedge borders, as well as at coinciding horizontal support/resistance levels. To the upside, the top wedge border resides around the key 1.1800 support/resistance region, a significant breakout above which price could eventually target recent long-term highs around 1.2300. To the downside, just beyond the bottom wedge border is the 1.1500 support/resistance level, a significant breakdown below which price could target further support around 1.1280.

James Chen, CMT
Chief Technical Strategist
FX Solutions

IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors.