December 28 2009 - USD/CHF - Stalking 2nd Retracement Leg

USD/CHF


* Daily: The USD/CHF, like many other greenback crosses is in retracement. US Dollar strength is being consolidated during the holidays ahead of the New Year. (Refer to Daily Video Technical Update 12.23.2009).
* Support for this retracement is at the 1.0200 area. If the market supports the pair here, coincident with the 50-Day MA that it broke in the beginning of December as a bullish signal, a further rally is likely. The swing projection is the 1.0750 area.
* 4H: Back to stalking the retracement. Unlike the EUR/USD, the USD/CHF seem to be in its second leg. It already broke below its 50-MA in the 4H time-frame. The market is stalled at the 1.0350 area, but looks to continue the decline ahead of the US session. If it breaks below 1.0300, this will likely materialize.
* This would offer a test of the 200-MA at the 1.0200 area. This would also be a completion of a Gartley pattern, and suggests bullish outlook if the market bottoms.
* One thing to caution is the market’s manner of decline in the upcoming session. Also, a rally from 1.0200 has a short-term target at 1.0380 (short-term powerline). A break of that strengthens the bullish case in for the long-term, but only a break of 1.0500 can confirm. Meanwhile, we need to observe the 4H, and maybe 1H time-frame to stalk the manner of the current retracement.



Fan Yang
Currency Analyst
Commodity Trading Advisor

FXTimes

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