USD/CHF Trying to Break a Falling Channel Resistance

by Admin

USD/CHF Daily chart 2/22/2013 7:47AM EST


Falling Channel: The daily USD/CHF chart shows a market that has been bullish in February after finding support at 0.9013. The rally is now breaking the 0.93 handle, and testing a falling channel resistance that goes back to the 0.9511 high in Nov. 2012.

Momentum, breakout: The RSI is pushing above the 60 level, showing loss of bearish momentum, so it appears the market is at the cusp of a bullish breakout. The immediately challenge to the upside is the 0.9380 resistance pivot. A rally above 0.9385 is likely to open up the next resistance pivot at 0.9511, especially if the daily RSI pushes through 70, reflecting bullish momentum.

Scenarios: It should be noted that the overall trend has been sideways and slightly bearish. The market would not return to bullish mode until clearing back above the 0.9511, origin of the falling channel. However, the 4H chart is already turning bullish, with price above the moving averages, which are pushing toward bullish alignment. The RSI also has kissed 70, and then held above 40 to tag 70 again. Will this bullish price action and momentum extend to the daily chart? A dip below 0.92, breaking the 4H chart’s rising channel would return the outlook to bearish.

USD/CHF 4H chart 2/22/2013 7:45AM EST