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Thursday, January 19, 2012

Long-Term Classic Technical Analysis of USD/CHF (Bearish View) - January 19, 2012


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Since February 2011, the USD/CHF pair hasn't touched these price levels.
The current levels of price between 0.9400-0.9780 are considered as a strong resistance area, as 50% Fibonacci level of the whole swing down to 1.1700-0.7050 and previous multiple tops are located there.
Now we see weakness of the bullish move and no visible higher maximums and lows indicating possible decline from these levels of resistance.
Daily closure below 0.9400-0.9380 which is 50% Fibonacci level gives confirmation for a soon decline targeting at 0.8585 in the long-term.
Yesterday we had a daily closure below 0.9400 at 0.9393 which is considered a short entry signal.
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The mentioned weakness of the bulls is manifested on this H4 chart as the pair began to enter a period of consolidation without enough steam to push higher.
The pair managed to break the lower limit of the bullish channel marked in blue, which is considered the 1st support line facing the pair now acting as resistance on retest.
The pair is now forming a "Double Top" reversal pattern with neck-line at 0.9400 which is confirmed now as the pair managed to closes below its neckline targeting 0.9250 initially.
Selling was recommended at the daily closure below 0.9400 or now this trade can be joined at the retest of the broken lower limit of the channel at 0.9444, that is considered good with TP at 0.9400, 0.9350, 0.9305 and then 0.9250.
SL should be H4 closure above 0.9530.
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