July 20, 2009
USD/CHF Analysis - A Shorting Opportunity Below 1.0591?
The USD/CHF is starting to look interesting because it is very close to being an excellent medium/long-term shorting candidate. The key level to watch out for is 1.0591. If we see a daily close below this level, then this could well be a good time to open a short position.
The price has been stuck in a tight trading range for a few months now and the 1.0591 figure that I've just mentioned represents the low point of this trading range, which is why it's significant.
Various other technical indicators would certainly support a downwards move. For instance the Supertrend indicator is currently red (indicating a bearish trend) on the daily, weekly and quarterly charts, and the EMA (200) is sloping downwards (with the price trading below this indicator) on all of these time frames as well.
Furthermore if you are a subscriber to Marketclub, you will notice that the current technical analysis score for the USD/CHF pair is -100, which indicates a maximum strength downward trend. Plus we have just today triggered a new sell signal on the weekly trade triangles at 1.0701 to support the monthly sell signal that is already in place.
So the point is that everything is in place for a nice downwards move, but I think we need to close below the lowest point of the current trading range (1.0591) before we can be confident about opening a new short position.
(This should be treated as general information only and does not constitute financial advice).