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USD/CHF Base to Complete Soon

19 June 2009

With a recovery phase in the US Dollar now deemed to be in progress (see last week’s US Dollar Index Update) we now look at the technical levels on the USD/CHF chart, and what could give this pair a boost.

From a longer term perspective the previous erosion of the projected bear channel top was the first sign that bulls were gaining strength at the expense of the long term bears.
Good support has been found from near a 76.4% pullback level.

Initial recovery from the early Jun low found clear resistance from near the 1.0974 13-May low.
This, and the higher 1.1027 38.2% level, offers first key resistance here, with breaks above these confirming that a base is in place.
But a further hurdle comes in at 1.1157/64, 19-Mar low and 50%, ahead of the bear channel top projection around 1.1250 just now. So much work must be done before longer term bulls can start reasserting control.

Meanwhile, for speculative bulls we had suggested a 1.0770-30 buy area in this week’s FX Trading Guide, with preference towards the high end of this. Fortunate longs thus triggered (1.0758 low seen) had initial stops just below the 1.0648 11-Jun low, aiming for 1.0980/1.1000 for partial profits, and then raising stops to just below 1.0758. More profit-taking may be targeted towards 1.1150.

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Crude Bears Lower the Tone

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