USDCHF Provides Conflicting Signals
Wednesday, 03 January 2007 20:22:53 GMT
Written by John Kicklighter, Currency Analyst
The higher and lower time frames of USDCHF price action offer an inconsistent read for the bulls and bears. Initially, on the daily time frame, a bullish signal was tripped when the session's rally pulled the pair through a descending trendline (beginning on October 13th) that recently stood at 1.2238. Traditionally a close above trendline like this (with five previous touches of confirmation) would send the bullish position traders in. However, a few technicals are in the way. On the same time frame, the 1.23 figure has acted as a flipping support/resistance level since September. What's more, a 50% fib of the big 1.1285-1.3288 bull falls at 1.2287. Refining the picture, the four-hour chart reveals a 1.2272 - 1.2110 range, which has yet to find a close outside of the band since December 14. Also, a 61.8% fib of the 1.2541-1.1880 move offers confluence with previously mentioned fib at 1.2288. This mixture of technicals could lead to interesting trading conditions should one side of the trade build enough momentum to encourage position flipping.
