USD/CHF Key Resistance Hindering Bulls
13 February 2009
Following the deep Nov/Dec pullback there has been a good recovery so far. We have been keeping in mind key resistance just above the 1.1800 level and, now that this has been neared, it seems bulls need to take a step back prior to a concerted attack on this.
WEEKLY CHART: 76.4% levels are useful things on USD/CHF charts. Here, the major 2008 recovery failed just ahead of a 76.4% retracement, but not before it had eroded a bear channel top projection – a medium term positive sign for us. The subsequent pullback was deep, finding support from just above the 76.4% correction level. And now, this percentage is looking relevant on the Daily chart below…
DAILY CHART: We think the chart is looking tired as it approaches the key 1.1828/42 area (25-Nov low and 76.4% bounce). Note the negative RSI divergence now visible, suggesting bull fatigue. Upside s/term is probably restricted now – the better s/term move should be to the downside soon. The first interesting support comes from the 1.2780 06-Jan high, below which would give future s/term bears a boost. Eventually we look for this chart to push higher.
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