Forex Technical Update

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USD/CHF 4H Chart 8/5/2012 9:50PM EDT

USD/CHF chart 8/5/2012 4H

As we begin a new week in the 8/5/2012 Asian session, the USD/CHF has cracked the 0.97 handle, and is sitting around here after dipping to 0.9655. There could be some correction in the near-term, but the 4H chart shows a swing projection toward 0.9620. It should be noted that a rising trendline going back to the lows of 6/20 and 6/29 could meet price action if it does fall to 0.9620. Thus we should anticipate some demand here.

The 4H chart also shows some bearish bias in terms of momentum as the RSI failed to push back above 60, although the RSI does not reflect strong bearish momentum just yet as it has not yet tagged 30. Still, the strength of Friday's price action does give the pair some bias for further downside.

When you look at the structure of the first swing down in late July, you see a 5-wave motive wave before some twisting and turning, which represents the correction phase. Therefore the structure so far also suggests some further downside.

The 1H chart shows that the market is a bit oversold in the near-term.

If we get a pullback, the first area to monitor for resistance (supply) between 0.9735 and 0.9750 as it was the support area throughout last week, disregarding the 8/2 spike. Also on the pullback, if the market is to continue the downtrend in the short-term, the RSI in the 1H chart should be expected to hold below 60, and even 50 if the momentum is very strong.

USD/CHF 4H Chart 8/5/2012 9:57PM EDT

USD/CHF 8/5/2012 1H 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.