Forex Technical Update

Previous: USD/CHF Threatens Key Declining Trendline after False Breakout (10/9)

USD/CHF Daily Chart 10/11/2012 8:35AM EDT

USD/CHF 10/11/2012 daily chart

Trendline holds: The daily USD/CHF chart shows a market that just tested a falling trendline going back to the July-high of 0.9971. The rejection also shows the 200-day SMA as resistance. Can this be a sign of bearish continuation? If so, we would first focus on the 0.9238 support pivot. The next support pivot is seen around 0.9050.

Momentum: Looking at the 4H chart, we see that the RSI reading tagged 70 and is now falling back. If it can push under 40, we at least show a lost of bullish momentum, and therefore improve the case for the bearish continuation scenario. But if the 4H RSI holds above 40, and the USD/CHF bounces off 0.9330 near 61.8% retracement, the focus remains on the falling trendline.

A break above this trendline right now requires at least a break above 0.94. If this does develop, USD/CHF introduces a reversal back to the bullish mode in the short-term, with the medium term outlook either sideways or bullish.

USD/CHF 4H Chart 8:40AM EDT 10/1/2012

USD/CHF 10/11/2012 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.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.

Copyright FX Times All rights reserved.