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A Chance for Further Gains in EUR/CHF

29 January 2009

After establishing a major low in October a strong rebound was then followed by a deep pullback. This found good support from a 76.4% level and recovery from here could shortly receive a boost.

MONTHLY CHART: The 2008 drop only briefly pierced the major 1.4391 low of 2001. This remains a key support area.

WEEKLY CHART: The bear channel top projection was eroded, but the slightly higher 76.4% retracement level proved a very good resistance level. 76.4% was also a useful level on the Daily chart…

DAILY CHART: The expected pullback from the 76.4% level was deep – another 76.4% (support) level has been tested now, and holding so far. Bulls now need a close above the 1.5142/61 area for a confidence boost, when the next target would be towards 1.5600 (another 76.4% level, as these are working well at present). At this stage any buyers on dips will probably favour initial stops below 1.4652 14-Jan low, perhaps seeking partial profits on the first break through 1.5142/61, then targeting towards 1.5590.

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