Forex Technical Update
The price action last Thursday showed confirmation for further bearish attempt, but this did not materialize. Instead the market rallied, and on Friday broke above a counter-trend trendline. The RSI in the 1H chart has been able to break above 60, and invalidates the bearish momentum established when the market broke below the 200 hour simple moving average. In fact the market came back above 200SMA but is now in a pullback from 0.9240 the broke below the 200SMA - there is no decisive direction yet.
The pullback now rests at an important level as it tests the broken counter-trend trendline now as support. Also the RSI reading is at 40. If the market is to remain ranging there is support here. A break below introduces some bearish bias. A break back above 60 confirms bullish bias.If the 4H RSI reading pops above 60, we have further clues that the market is in a bullish continuation. The orientations of the price and moving averages all point to a bullish stance on the 4H chart. The RSI cracked 40, but failed to dip below 30, reflecting weak bearish momentum in last week's attempt. A break above the 0.9250 level, should open up the near-term resistance near 0.9320. A break above confirms bullish continuation. Some upside targets can be found in this recent USD/CHF update.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.