Forex Technical Update

Previous: USD/CHF – Corrective Rally vs. 0.9420 (9/27)

USD/CHF 4H Chart 10/1/2012 9:15AM EDT

USD/CHF 10/1/2012 4H chart

The USD/CHF has been channeling higher since the 0.9238 low on Sept. 13 as seen in the 4H chart. This rally has broken the 0.9340 and 0.9420 pivots. The next resistance factor will be key because it is the declining trendline from the 0.9970 high from July, seen in the daily chart.

Bearish scenario: Back to the 4H chart, we can see that the market is fading the USD/CHF. The declining trendline is winning against the rising channel so far. A strong break below 0.9340 will 1) create a lower low, 2) push the RSI below 40, and sign loss of the slight bullish outlook since mid-Sept, 3) break below the channel, which in a higher time-frame is a flag pattern.

This bearish scenario opens up the 0.9238 low again.

Bullish scenario: To the upside, a break above 0.9450 would probably break above the declining trendline. Then the ability to push above 0.95 handle exposes the 0.9970 high, but we should monitor short-term resistance pivots as well. 0.96 for example is a key level, 50% retracement of the 0.9970-0.9238 swing.

USD/CHF Daily Chart 9:20AM 10/1/2012

USD/CHF 10/1/2012 daily 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.