Forex Technical Update
USD/CHF Daily Chart 9/14/2012 7:15APM EDT
The Fed's announcement of QE3 smacked the USD across the board. This reaction extended against most currency pairs. The USD/CHF's reaction first tested a previously broken pivot at 0.9420, where it found support, followed by a sharp decline that is now extending below a key rising trendline, seen more clearly in the weekly chart.
In the daily chart above, you can seen bearish momentum developing as the RSI breaks below 30, and you can see price action breaking below the 200-day SMA as well as accelerating below the already declining channel support.
In the weekly chart below, you can see that the declining is really going against a bull run from the 0.7065 low of August 2011 to the 0.9971 high of July 2012. So far we have retraced 23.6% of this almost 1 year rally. With that in perspective, note the RSI is coming down to test 40. A break below 40 reflects loss of this year-long build up of bullish momentum. Price action will probably have key support in the 0.8930 support area up to the 0.90 psychological handle. A break below 0.89 would be a major sign that USD/CHF has turned from bullish to sideways-to-bearish in this time-frame.
USD/CHF Weekly Chart 9/14/2012
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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