(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
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