USD/CHF Weekly Outlook

By IBTimes Staff Reporter | January 31 2010 2:47 AM

USD/CHF's rally extended further to as high as 1.0640 last week and has already met initial target of 1.0590 medium term support turned resistance next. Initial bias remains on the upside this week and further rise should now be seen to 100% projection of 0.9916 to 1.0506 from 1.0131 at 1.0721 next. On the downside, though, below 1.0481 minor support will argue that a short term top is formed and bring some consolidations before staging another rally.

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In the bigger picture, medium term fall from 1.1963 has completed with five waves down to 0.9916 already, on bullish convergence condition in daily MACD. Also, the three wave consolidation from 1.2296 should be finished too. Current rise from 0.9916 is expected to extend further to medium term trend line resistance first (now at 1.0963). Sustained trading above the trend line will affirm the case that long term rise from 2008 low of 0.9634 is resuming for another high above 1.2296. On the downside however, a break of 1.0131 support will invalidate this bullish view and argue that medium term down trend in USD/CHF is still in progress for another low below 0.9916.

In the longer term picture, a long term bottom is no doubt in place at 0.9634 with bullish convergence condition in daily MACD. USD/CHF failed to take out 55 months EMA and reversed again and thus gives no confirmation of long term reversal yet. We're neutral in the long term outlook for the moment and would wait for further evidence from the markets before making a stance.

USD/CHF