(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; 50-period simple moving average in light blue.)
7/17/2009 € USD/CHF € Price action on USD/CHF, a daily chart of which is shown, has just bounced up off a confluence of two support factors. The first support factor can be found at the bottom of a significant parallel uptrend channel that began in late May. The second support factor is the key 1.0700 horizontal support/resistance level. Although this pair is generally in an overall downtrend, price has lately been entrenched in a prolonged sideways consolidation that is biased slightly to the upside within the noted parallel uptrend channel. A strong breakdown below both this channel and the 1.0700 level should break this consolidation, potentially continuing the downtrend that has been in place since late last year. In this event, a clear downside support target resides in the 1.0400 support/resistance price region. In the event that price continues its bounce up off the current support confluence and moves up once again within the channel, upside resistance targets include the top of the channel and the 1.1100 price region.
James Chen, CMT
Chief Technical Strategist
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