Wednesday, May 18, 2011

USD/CHF ~ Update ~ 18 May 2011

It's been a looong time since I've posted an update on a currency pair aside from the EUR/USD.

I plan to do updates on the most important pairs more often now (i. e. once a week or so (like my EUR/USD updates).

So let's start with the USD/CHF:

Long-term the trend is still down. There is a very strong resistance around 1.00 and then at the downtrend line around 1.13. As long as these levels hold I'm bearish on the USD/CHF.

Medium-term the trend is down. Despite the 400 pip rally since early May the trend hasn't changed. If you have a look at the chart above you can clearly see the stair step decline. Each downleg was followed by a rally which tested the previous low thus we can expect the current rally to peak around the 0.9ish level which should be followed by another sell-off to new lows. If we break above 0.9ish the next level is around 0.93-94. A break above this level should lead to a rally to the long-term resistance around 1.00.

Short-term the trend is sideways. The break out of the downtrend channel was bullish and lead to a rally to the resistance around 0.90. Since we've almost reached this target though I'm not bullish anymore.
As you can see in the chart there is a nice little H&S with a neckline at 0.88. If it breaks the short-term trend is down with targets at 0.87 and 0.8550.