(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; downtrend lines in red; chart pattern in yellow; Fibonacci retracement levels in grey; 50-period simple moving average in light blue.)
4/04/2008 USD/CHF The large inverted pennant formation on the USD/CHF daily chart, as shown, has been itching at pushing price lower towards a continuation of the long-term, accelerated downtrend. This pennant is outlined on the chart in dotted yellow. On Thursday, price poked up slightly above the upper border of the pennant, but then promptly moved back down again on Friday, ostensibly in reaction to Fridays U.S. Non-Farm Payrolls report. At this point, technical traders are looking to short on a clean breakdown below the bottom border of the pennant. In this event, the next major support level to the downside resides in the region of the lowest point of the pennant around 0.9650. One last technical note of interest involves the Fibonacci retracements, which are also hinting at a downward bias. Thursdays daily bar reached up to the key 38.2% Fib level, and then promptly retreated from this retracement level (the high-to-low retracement span being measured from the swing high on 2/13/2008 to the lowest point of the inverted pennant reached on 3/17/2008).
Chief Technical Analyst
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