USD/CHF Bears Are Still Winning Favor As Price Slips & s/t Bulls Waver
24 April 2009
After giving back about 50% of this year’s gains in March, there has been a somewhat choppy recovery, which we found hard to interpret – the start of another bull leg or merely a correction ahead of another slip lower? At the moment the latter, bearish, outcome is favoured.
WEEKLY CHART: Following our 27th Feb Update on this market 76.4% levels are still proving useful. Here, the pullback from near a 76.4% recovery level found support from just above another 76.4% level in late Dec. On the Daily chart resistance has emerged from…a 76.4% level.
DAILY CHART: In the FX Trading Guide we had decided to retain a bearish stance while the 1.1775 76.4% retracement level stayed intact. It has provided good s/term resistance, and any break of it now would be that much more meaningful for bulls. Meanwhile, we have drawn in today’s price action so far, showing initial (though inconclusive) break of a small channel base, which is s/term negative. As the bear scenario continues to unfold we first target a retest to the 50% level and 1.1157 19-Mar low. However, this should now provide only flimsy support at best - the lower 1.1000 area is of far greater interest. This is where the 61.8% retracement level and a Fibo projection coincide – at the moment we would look for support to emerge around here, unclear if lower 1.0745 76.4% level can be tested.
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