width=398(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; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

4/05/2010 - USD/CHF - Price action on USD/CHF, a daily chart of which is shown, has continued to follow and respect a clear uptrend support line extending from the November 2009 lows below parity. Late last week, price dipped below this support trendline, as well as the key 1.0500 support level, but quickly recovered to end the week well above these support factors. Currently, price is also close to a long-term downtrend resistance line extending from the November 2008 high. The future directional bias on this currency pair could very well be indicated by a break of one of these trendlines. A strong and true breakdown below the noted uptrend support line and the 1.0500 level could prompt the pair to work its way eventually towards targeting parity once again. Conversely, a breakout above the noted long-term downtrend resistance line could target the 1.0900 region, which represents the last major resistance high, and then the key 1.1000 resistance region.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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