Forex Technical Update

Previous: USD/CHF Extends Recover After Throwback (9/24)

USD/CHF 4H Chart 9/27/2012 8:55 AM EDT

USD/CHF 9/27/2012 1H chart

0.9420 pivot: The USD/CHF has been in a corrective rally for the past couple of weeks, since finding support at 0.9238. The 1H chart shows a choppy market, but one that is making higher lows and higher highs. The 1H RSI reading has also been holding above 40 and tagging 70, a sign of persistent bullish momentum.

Rally rejected: However, this rally is now being challenged. 0.9420 is a key pivot. Was resistance on 9/13, and was support 6/20, each followed by a strong swing. So far, the 1H USD/CHF chart shows a market rejected from 0.9420. The bearish action so far is testing a trendline from last Friday’s low of 0.9285. A break below 0.9360, clearing below this trendline, exposes that 0.9285 low.

Bullish scenario: IF the market stays above 0.9350, and pushes back above 0.9420, is is extending the corrective rally. The next resistance cluster is in the 0.94840.95 area. There are support and resistance pivots, and a declining trendline as well as the 200-HR-SMA looming there. This will be the last line of defense before the bullish action switches from corrective mode, to breakout mode.

USD/CHF Daily Chart 7:12AM 9/24/2012

USD/CHF 9/27/2012 4H chart

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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