At least, this twister wreaked havoc over all currency pairs yesterday.The/ anomaly I spotted was just in time and boy, what a move once those break levels were exceeded… My mind is now slotting together how the Europeans in particular are going to develop on a daily basis while remaining in broad consolidation. I say this as it has been notable that USD/CHF reacted less violently than both EUR/USD and GBP/USD. This has required me to make a much deeper review of GBP/USD having broken above the 1.5606 high. While I was particularly disappointed with this development the blow was softened by the fact that EUR/USD and GBP/USD are now in unison and should have relative correlation both in the follow-through higher now but then also in the reversal we should see. I have thoughts how USD/CHF will develop but it does seem to be mainly independent of the other two.Basically we do still have further dollar losses to come but I can’t see these being excessive now. Strangely enough this tends to work alongside the U.S. equity markets also.USD/JPY struggled in the early hours but then shot lower as if someone had stuck a sharp pin in its backside. It has dipped a little more than I was anticipating at this stage but overall there is still further to go but expect less directional losses and a fairly quite second correction higher. It basically remains in line with the target offered in Tuesday’s medium term outlook but should now behave with greater restraint.How this impact on EUR/JPY is somewhat different. Clearly we should still have the tug and pull either side from a rising EUR/USD and falling USD/JPY. Thus, I don’t expect excessive moves just yet. However, some losses will be expected after the current correction but the larger downside risk will come once EUR/USD turns back lower.Overall, we’re still in a “sell on pullback” mode but do be aware that the follow-through will be less directional.
USD/CHF” title=”USD/CHF” width=”1758″ height=”808″ />For the 24 hours leading to 23:00 GMT, the USD declined 1.46% against the CHF and closed at 0.9297.On Thursday, Switzerland’s consumer price index (CPI) climbed 0.1% (MoM) in May, in line with the market expectation and compared to a flat change recorded the previous month. Additionally, on a monthly basis, the EU harmonised consumer price index (HCPI) remained flat in May, following a decline of 0.1% in April.In the Asian session at GMT0300, the pair is trading at 0.9271 with the USD trading 0.28% lower from Thursday’s close.The pair was expected to find support at 0.9186, and a fall through to take it to the next support level of 0.9102. The pair was expected to find its first resistance at 0.9395, and a rise through to take it to the next resistance level of 0.9520.
The USD/CHF’s upward movement from 0.9130 is extending as high as 0.9664. Support is at the upward trend line on the 4-hour chart. As long as the trend line support holds, the uptrend could be expected to continue and further rise towards 0.9800 area could be seen over the next several days. On the downside, a clear break below the trend line support will suggest that consolidation of the uptrend is underway. The pair will then find support around 0.9450.
USD/CHF remains in downtrend from 0.9751, the rise from 0.9264 is likely consolidation of the downtrend. Resistance is now located at the upper line of the price channel on the 4-hour chart. As long as the channel resistance holds, the downtrend could be expected to resume, and one more fall to 0.9200 area is still possible after consolidation. On the upside, a clear break above the channel resistance will indicate that lengthier consolidation of the downtrend is underway, then the pair will find resistance around 0.9450.
USD/CHF continues its downward movement from 0.9535, and the fall extends to as low as 0.9228. Key resistance is now at 0.9337, as long as this level holds, the downtrend could be expected continue, and next target would be at 0.9170 area. On the upside, a break above 0.9337 resistance will indicate that lengthier consolidation of the longer term downtrend from 0.9751 is underway, then the pair will find resistance around 0.9400.
A disastrous day, I had everything planned for the Europeans. The USD/CHF was a little puzzling. I went to bed, and upon awakening saw my plans wrecked. That’s the bad news. The good news is that yesterday’s dollar weakness has brought the Europeans back into broad correlation, and as such I remain with an underlying dollar bullish outlook overall. Yesterday’s developments haven’t wrecked that part of the plan. However, what it has done is force an uncomfortable detour, at least in EUR/USD and USD/CHF. While the GBP/USD has actually retained its structure extremely well.When I say that the Europeans are in broad correlation, interestingly all three Europeans are in totally different structures, but all basically signaling the same short term directional fractals. Within this we still have some dollar weakness to come but not until a minor correction is seen. This is where the subtlety of the different structures need to be understood, so even if you only trade one of the Europeans, I recommend that you read and follow each of the inpidual analyses for all three. Combined they are going to provide some strong clue to turning levels.I had been puzzling over the AUD/USD, but the development in the Europeans has clarified the situation here. With the Aussie, the correlation isn’t quite so close, although broadly has been pretty similar. Thus, this pair should make its way higher and still has a little way to go.After its initial burst higher yesterday morning the USD/JPY fell back into rather introspective development. There is a choice to be made regarding continued consolidation and direct gains. I’m rather mixed between the two since if we’re to see direct gains it does suggest quite a decent follow through. This may well suit that the EUR/JPY does have a potential bullish outlook, but one that I had shied away from yesterday because the follow-through wave would have been excessive. I still retain caution, and perhaps this is best as we merely see continued sideways development in USD/JPY. However, don’t fight any break higher.
The USD/CHF breaks below 0.9147 support, suggesting that the downtrend from 0.9751 (July 9, high) has resumed. Further decline could be expected after a minor consolidation, and next target would be at the 0.9050 area. Resistance is now at downward trend line on 4-hour chart, as long as the trend line resistance holds, and the downtrend from 0.9455 will continue.
Earlier this week, we identified and possible head and shoulders reversal pattern in sterling. Here we show a Great Graphic of possible head and shoulders bottom of the dollar against the Swiss franc, drawn on Bloomberg. It may not be as clear as the reversal pattern in sterling. It is also not confirmed, as sterling’s was, with bearish pergence in the RSIs. However, the MACDs have crossed to the upside.
USD/CHF Chart” title=”USD/CHF Chart” src=”https://d1-invdn-com.akamaized.net/content/picb04a1d511cab2cd4fbffff3f209b962c.gif” height=”527″ width=”736″ /> As we noted with the head and shoulders pattern with sterling, it is common after the neckline is violated to come back and test the neckline again,. The early dollar slippage effective accomplished this with the Swiss franc and, as you can see, the dollar recovered. We also note that that 5-day moving average is posited to cross above the 20-day average early next week. The minimum measuring objective for the head and shoulders pattern is near CHF0.9200, which roughly corresponds with a 50% retracement of the dollar’s decline from the CHF0.9455 area in early September. The 61.8% retracement is found near CHF0.9270.
2013.10.31 7:30AM ET | USD/CHF Currency PairHere are the current Pivot Points Levels with Support (S) and Resistance (R) for the USD/CHF currency pair. Price action is currently trading sharply over the daily pivot point at the 0.90328 price level, according to data at 7:30 AM ET. The pair opened the Asian trading session earlier today above the daily pivot and has continued on it way higher. Over the course of the day, the USD/CHF has broken through the 0.9000 major level and ascended to trading above the R1 resistance level.
USD/CHF H1″ border=”0″ height=”250″ width=”655″ />Daily Pivot Point: 0.89859– S1 – 0.89487– S2 – 0.89071– S3 – 0.88699– R1 – 0.90275– R2 – 0.90647– R3 – 0.91063Weekly Pivot Points: USD/CHFPrices are currently trading over the weekly pivot point as of Thursday morning in the US. The USD/CHF has been on a bullish pace so far this week after opening the trading week below the weekly pivot. This level has acted as support a few times this week with bounces pushing the USD/CHF higher.
USD/CHF H4″ border=”0″ height=”250″ width=”655″ />Weekly Pivot Point: 0.89530– S1 – 0.88622– S2 – 0.87986– S3 – 0.87078– R1 – 0.90166– R2 – 0.91074– R3 – 0.91710Monthly Pivot Point: 0.91742– S1 – 0.88938– S2 – 0.87397– S3 – 0.84593– R1 – 0.93283– R2 – 0.96087– R3 – 0.97628Disclaimer: Foreign Currency trading and trading on margin carries a high level of risk and volatility and can result in loss of part or all of your investment. All information and opinions contained do not constitute investment advice and accuracy of prices, charts, calculations cannot be guaranteed.
BIAS: I have noted an alternative outcome that should also be observedResistance: 0.9113 0.9134 0.9151-61 0.9174-77
Support: 0.9096 0.9074-84 0.9066 0.9040-45MAIN ANALYSIS: The 0.9148-53 are held perfectly but the losses we have seen are not (yet) deep enough to retest the area identified down at 0.8990-0.9024. Having looked at the daily chart I see the potential for the current move to be a recycling that could actually see 0.9074-84 support for a move back to above 0.9151 to 0.9172 – back to 0.9074-84 and finally to the 0.9200-20 area. If this pattern of development occurs and the 0.9200-20 area is achieved as EUR/USD reaches its support, and along with bearish pergences here. Then, I feel this is the right area to look for losses again. COUNTER ANALYSIS: Therefore, only a direct break above 0.9220 and probably best above the 0.9235-40 resistance would extend gains to 0.9295-00 resistance initially.A direct break below 0.9065 would then risk losses to 0.9040-45 and potentially the 0.8990-0.9024 area. If seen then we’re likely to see gains develop but must not break above 0.9137-53 else a stronger bullish move will develop.MEDIUM TERM ANALYSIS:5th November: Having reviewed again I realised that the 0.8889 low could be part of a complex correction that could see a recycling back to the 0.9200-20 area (max 0.9235-40.) This would tend to suit the momentum indications if both hourly & 4-hour charts show bearish pergences. Thus, only above 0.9240 would trigger much stronger gains.A peak at 0.9200-20 would then allow losses to develop.